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Tax Form 1040 Year 2008

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Tax Form 1040 Year 2008

Tax form 1040 year 2008 Publication 531 - Main Content Table of Contents Keeping a Daily Tip RecordElectronic tip record. Tax form 1040 year 2008 Reporting Tips to Your EmployerElectronic tip statement. Tax form 1040 year 2008 Final report. Tax form 1040 year 2008 Tip Rate Determination and Education Program Reporting Tips on Your Tax Return Allocated Tips How To Get Tax Help Keeping a Daily Tip Record Why keep a daily tip record. Tax form 1040 year 2008   You must keep a daily tip record so you can: Report your tips accurately to your employer, Report your tips accurately on your tax return, and Prove your tip income if your return is ever questioned. Tax form 1040 year 2008 How to keep a daily tip record. Tax form 1040 year 2008   There are two ways to keep a daily tip record. Tax form 1040 year 2008 You can either: Write information about your tips in a tip diary, or Keep copies of documents that show your tips, such as restaurant bills and credit or debit card charge slips. Tax form 1040 year 2008 You should keep your daily tip record with your tax or other personal records. Tax form 1040 year 2008 You must keep your records for as long as they are important for administration of the federal tax law. Tax form 1040 year 2008 For information on how long to keep records, see How Long to Keep Records in chapter 1 of Publication 17, Your Federal Income Tax. Tax form 1040 year 2008    If you keep a tip diary, you can use Form 4070A, Employee's Daily Record of Tips. Tax form 1040 year 2008 To get Form 4070A, ask the Internal Revenue Service (IRS) or your employer for Publication 1244, Employee's Daily Record of Tips and Report to Employer. Tax form 1040 year 2008 Publication 1244 is also available at www. Tax form 1040 year 2008 irs. Tax form 1040 year 2008 gov/pub1244. Tax form 1040 year 2008 Publication 1244 includes a 1-year supply of Form 4070A. Tax form 1040 year 2008 Each day, write in the information asked for on the form. Tax form 1040 year 2008 A filled-in Form 4070A is shown on the following page. Tax form 1040 year 2008   In addition to the information asked for on Form 4070A, you also need to keep a record of the date and value of any noncash tips you get, such as tickets, passes, or other items of value. Tax form 1040 year 2008 Although you do not report these tips to your employer, you must report them on your tax return. Tax form 1040 year 2008   If you do not use Form 4070A, start your records by writing your name, your employer's name, and the name of the business (if it is different from your employer's name). Tax form 1040 year 2008 Then, each workday, write the date and the following information. Tax form 1040 year 2008 Cash tips you get directly from customers or from other employees. Tax form 1040 year 2008 Tips from credit and debit card charge customers that your employer pays you. Tax form 1040 year 2008 The value of any noncash tips you get, such as tickets, passes, or other items of value. Tax form 1040 year 2008 The amount of tips you paid out to other employees through tip pools or tip splitting, or other arrangements, and the names of the employees to whom you paid the tips. Tax form 1040 year 2008 Please click here for the text description of the image. Tax form 1040 year 2008 Sample Filled-in Form 4070A from Publication 1244 Electronic tip record. Tax form 1040 year 2008   You can use an electronic system provided by your employer to record your daily tips. Tax form 1040 year 2008 If you do, you must receive and keep a paper copy of this record. Tax form 1040 year 2008 Service charges. Tax form 1040 year 2008    Do not write in your tip diary the amount of any service charge that your employer adds to a customer's bill and then pays to you and treats as wages. Tax form 1040 year 2008 This is part of your wages, not a tip. Tax form 1040 year 2008 The following factors determine if you have a tip or service charge: The payment is made free from compulsion; The customer has the right to determine the amount of payment; The payment is not subject to negotiation or dictated by employer policy; and The customer generally has the right to determine who receives the payment. Tax form 1040 year 2008 See examples below. Tax form 1040 year 2008 Example 1. Tax form 1040 year 2008 Good Food Restaurant adds an 18% charge to the bill for parties of 6 or more customers. Tax form 1040 year 2008 Jane's bill for food and beverages for her party of 8 includes an amount on the tip line equal to 18% of the charges for food and beverages, and the total includes this amount. Tax form 1040 year 2008 Because Jane did not have an unrestricted right to determine the amount on the “tip line,” the 18% charge is considered a service charge. Tax form 1040 year 2008 Do not include the 18% charge in your tip diary. Tax form 1040 year 2008 Service charges that are paid to you are considered wages, not tips. Tax form 1040 year 2008 Example 2. Tax form 1040 year 2008 Good Food Restaurant includes sample calculations of tip amounts at the bottom of its bills for food and beverages provided to customers. Tax form 1040 year 2008 David's bill includes a blank “tip line,” with sample tip calculations of 15%, 18%, and 20% of the charges for food and beverages at the bottom of the bill beneath the signature line. Tax form 1040 year 2008 Because David is free to enter any amount on the “tip line” or leave it blank, any amount he includes is considered a tip. Tax form 1040 year 2008 Be sure to include this amount in your tip diary. Tax form 1040 year 2008 Sample Filled-in Form 4070 from Publication 1244 Please click here for the text description of the image. Tax form 1040 year 2008 Filled-in Form 4070 Reporting Tips to Your Employer Why report tips to your employer. Tax form 1040 year 2008   You must report tips to your employer so that: Your employer can withhold federal income tax and social security, Medicare, Additional Medicare, or railroad retirement taxes, Your employer can report the correct amount of your earnings to the Social Security Administration or Railroad Retirement Board (which affects your benefits when you retire or if you become disabled, or your family's benefits if you die), and You can avoid the penalty for not reporting tips to your employer (explained later). Tax form 1040 year 2008 What tips to report. Tax form 1040 year 2008   Report to your employer only cash, check, and debit and credit card tips you receive. Tax form 1040 year 2008   If your total tips for any 1 month from any one job are less than $20, do not report the tips for that month to that employer. Tax form 1040 year 2008   If you participate in a tip-splitting or tip-pooling arrangement, report only the tips you receive and retain. Tax form 1040 year 2008 Do not report to your employer any portion of the tips you receive that you pass on to other employees. Tax form 1040 year 2008 However, you must report tips you receive from other employees. Tax form 1040 year 2008   Do not report the value of any noncash tips, such as tickets or passes, to your employer. Tax form 1040 year 2008 You do not pay social security, Medicare, Additional Medicare, or railroad retirement taxes on these tips. Tax form 1040 year 2008 How to report. Tax form 1040 year 2008   If your employer does not give you any other way to report your tips, you can use Form 4070, Employee's Report of Tips to Employer. Tax form 1040 year 2008 Fill in the information asked for on the form, sign and date the form, and give it to your employer. Tax form 1040 year 2008 A sample filled-in Form 4070 is shown above. Tax form 1040 year 2008 To get a 1-year supply of the form, ask the IRS or your employer for Publication 1244. Tax form 1040 year 2008   If you do not use Form 4070, give your employer a statement with the following information. Tax form 1040 year 2008 Your name, address, and social security number. Tax form 1040 year 2008 Your employer's name, address, and business name (if it is different from your employer's name). Tax form 1040 year 2008 The month (or the dates of any shorter period) in which you received tips. Tax form 1040 year 2008 The total tips required to be reported for that period. Tax form 1040 year 2008 You must sign and date the statement. Tax form 1040 year 2008 Be sure to keep a copy with your tax or other personal records. Tax form 1040 year 2008   Your employer may require you to report your tips more than once a month. Tax form 1040 year 2008 However, the statement cannot cover a period of more than 1 calendar month. Tax form 1040 year 2008 Electronic tip statement. Tax form 1040 year 2008   Your employer can have you furnish your tip statements electronically. Tax form 1040 year 2008 When to report. Tax form 1040 year 2008   Give your report for each month to your employer by the 10th of the next month. Tax form 1040 year 2008 If the 10th falls on a Saturday, Sunday, or legal holiday, give your employer the report by the next day that is not a Saturday, Sunday, or legal holiday. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 You must report your tips received in September 2014 by October 10, 2014. Tax form 1040 year 2008 Final report. Tax form 1040 year 2008   If your employment ends during the month, you can report your tips when your employment ends. Tax form 1040 year 2008 Penalty for not reporting tips. Tax form 1040 year 2008   If you do not report tips to your employer as required, you may be subject to a penalty equal to 50% of the social security, Medicare, Additional Medicare, or railroad retirement taxes you owe on the unreported tips. Tax form 1040 year 2008 (For information about these taxes, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, later. Tax form 1040 year 2008 ) The penalty amount is in addition to the taxes you owe. Tax form 1040 year 2008   You can avoid this penalty if you can show reasonable cause for not reporting the tips to your employer. Tax form 1040 year 2008 To do so, attach a statement to your return explaining why you did not report them. Tax form 1040 year 2008 Giving your employer money for taxes. Tax form 1040 year 2008   Your regular pay may not be enough for your employer to withhold all the taxes you owe on your regular pay plus your reported tips. Tax form 1040 year 2008 If this happens, you can give your employer money until the close of the calendar year to pay the rest of the taxes. Tax form 1040 year 2008   If you do not give your employer enough money, your employer will apply your regular pay and any money you give to the taxes, in the following order. Tax form 1040 year 2008 All taxes on your regular pay. Tax form 1040 year 2008 Social security, Medicare, Additional Medicare, or railroad retirement taxes on your reported tips. Tax form 1040 year 2008 Federal, state, and local income taxes on your reported tips. Tax form 1040 year 2008    Any taxes that remain unpaid can be collected by your employer from your next paycheck. Tax form 1040 year 2008 If withholding taxes remain uncollected at the end of the year, you may be subject to a penalty for underpayment of estimated taxes. Tax form 1040 year 2008 See Publication 505, Tax Withholding and Estimated Tax, for more information. Tax form 1040 year 2008    Uncollected taxes. Tax form 1040 year 2008 You must report on your tax return any social security and Medicare taxes, or railroad retirement taxes that remained uncollected at the end of 2013. Tax form 1040 year 2008 These uncollected taxes will be shown on your 2013 Form W-2. Tax form 1040 year 2008 See Reporting uncollected social security, Medicare, Additional Medicare, or railroad retirement taxes on tips reported to your employer under Reporting Tips on Your Tax Return, later. Tax form 1040 year 2008 Tip Rate Determination and Education Program Your employer may participate in the Tip Rate Determination and Education Program. Tax form 1040 year 2008 The program was developed to help employees and employers understand and meet their tip reporting responsibilities. Tax form 1040 year 2008 There are two agreements under the program: the Tip Rate Determination Agreement (TRDA) and the Tip Reporting Alternative Commitment (TRAC). Tax form 1040 year 2008 A variation of the TRAC program, the Employer Tip Reporting Alternative Commitment, (EmTRAC) was designed to allow employers in the food and beverage industry to design and receive approval for their own TRAC programs. Tax form 1040 year 2008 For information on the EmTRAC program, see Notice 2001-1, which is on page 261 of Internal Revenue Bulletin 2001-2 at www. Tax form 1040 year 2008 irs. Tax form 1040 year 2008 gov/pub/irs-irbs/irb01-02. Tax form 1040 year 2008 pdf. Tax form 1040 year 2008 If you are employed in the gaming industry, your employer may participate in the Gaming Industry Tip Compliance Agreement Program. Tax form 1040 year 2008 See Revenue Procedure 2007-32, 2007-22 I. Tax form 1040 year 2008 R. Tax form 1040 year 2008 B. Tax form 1040 year 2008 1322, available at www. Tax form 1040 year 2008 irs. Tax form 1040 year 2008 gov/pub/irs-irbs/irb07_22. Tax form 1040 year 2008 pdf. Tax form 1040 year 2008 Your employer can provide you with a copy of any applicable agreement. Tax form 1040 year 2008 To find out more about these agreements, visit IRS. Tax form 1040 year 2008 gov and enter “restaurant tip reporting” in the search box. Tax form 1040 year 2008 You may also call 1-800-829-4933, visit www. Tax form 1040 year 2008 irs. Tax form 1040 year 2008 gov/localcontacts for the IRS Taxpayer Assistance Center in your area, or send an email to Tip. Tax form 1040 year 2008 Program@irs. Tax form 1040 year 2008 gov and request information on this program. Tax form 1040 year 2008 Reporting Tips on Your Tax Return How to report tips. Tax form 1040 year 2008   Report your tips with your wages on Form 1040, line 7; Form 1040A, line 7; Form 1040EZ, line 1; Form 1040NR, line 8; or Form 1040NR-EZ, line 3. Tax form 1040 year 2008 What tips to report. Tax form 1040 year 2008   Generally, you must report all tips you received in 2013 on your tax return, including both cash tips and noncash tips. Tax form 1040 year 2008 Any tips you reported to your employer as required in 2013 are included in the wages shown in box 1 of your Form W-2. Tax form 1040 year 2008 Add to the amount in box 1 only the tips you did not report to your employer. Tax form 1040 year 2008   However, any tips you received in 2013 that you reported to your employer as required after 2013 but before January 11, 2014, are not included in the wages shown in box 1 of your 2013 Form W-2. Tax form 1040 year 2008 Do not include the amount of these tips on your 2013 tax return. Tax form 1040 year 2008 Instead, include them on your 2014 tax return. Tax form 1040 year 2008 Tips you received in 2012 that you reported to your employer as required after 2012 but before January 11, 2013, are included in the wages shown in box 1 of your 2013 Form W-2. Tax form 1040 year 2008 Although these tips were received in 2012, you must report them on your 2013 tax return. Tax form 1040 year 2008   If you participate in a tip-splitting or tip-pooling arrangement, report only the tips you receive and retain. Tax form 1040 year 2008 Do not report on your income tax return any portion of the tips you receive that you pass on to other employees. Tax form 1040 year 2008 However, you must report tips you receive from other employees. Tax form 1040 year 2008    If you received $20 or more in cash and charge tips in a month and did not report all of those tips to your employer, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer, later. Tax form 1040 year 2008    If you did not keep a daily tip record as required and an amount is shown in box 8 of your Form W-2, see Allocated Tips, later. Tax form 1040 year 2008   If you kept a daily tip record and reported tips to your employer as required under the rules explained earlier, add the following tips to the amount in box 1 of your Form W-2. Tax form 1040 year 2008 Cash and charge tips you received that totaled less than $20 for any month. Tax form 1040 year 2008 The value of noncash tips, such as tickets, passes, or other items of value. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 Ben Smith began working at the Blue Ocean Restaurant (his only employer in 2013) on June 30 and received $10,000 in wages during the year. Tax form 1040 year 2008 Ben kept a daily tip record showing that his tips for June were $18 and his tips for the rest of the year totaled $7,000. Tax form 1040 year 2008 He was not required to report his June tips to his employer, but he reported all of the rest of his tips to his employer as required. Tax form 1040 year 2008 Ben's Form W-2 from Blue Ocean Restaurant shows $17,000 ($10,000 wages + $7,000 reported tips) in box 1. Tax form 1040 year 2008 He adds the $18 unreported tips to that amount and reports $17,018 as wages on his tax return. Tax form 1040 year 2008 Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer. Tax form 1040 year 2008    If you received $20 or more in cash and charge tips in a month from any one job and did not report all of those tips to your employer, you must report the social security, Medicare, and Additional Medicare taxes on the unreported tips as additional tax on your return. Tax form 1040 year 2008 To report these taxes, you must file a return even if you would not otherwise have to file. Tax form 1040 year 2008 You must use Form 1040, Form 1040NR, Form 1040NR-EZ, Form 1040-SS, or 1040-PR (as appropriate) for this purpose. Tax form 1040 year 2008 (You cannot file Form 1040EZ or Form 1040A. Tax form 1040 year 2008 )    Use Form 4137, Social Security and Medicare Tax on Unreported Tip Income, to figure social security and Medicare taxes. Tax form 1040 year 2008 Enter the tax on your return as instructed, and attach the completed Form 4137 to your return. Tax form 1040 year 2008 Use Form 8959 to figure Additional Medicare Tax. Tax form 1040 year 2008 If you are subject to the Railroad Retirement Tax Act, you cannot use Form 4137 to pay railroad retirement tax on unreported tips. Tax form 1040 year 2008 To get railroad retirement credit, you must report tips to your employer. Tax form 1040 year 2008 Reporting uncollected social security, Medicare, Additional Medicare, or railroad retirement taxes on tips reported to your employer. Tax form 1040 year 2008    You may have uncollected taxes if your regular pay was not enough for your employer to withhold all the taxes you owe and you did not give your employer enough money to pay the rest of the taxes. Tax form 1040 year 2008 For more information, see Giving your employer money for taxes , under Reporting Tips to Your Employer, earlier. Tax form 1040 year 2008   If your employer could not collect all the social security and Medicare taxes, or railroad retirement taxes you owe on tips reported for 2013, the uncollected taxes will be shown in box 12 of your Form W-2 (codes A and B). Tax form 1040 year 2008 You must report these amounts as additional tax on your return. Tax form 1040 year 2008   If you worked in the U. Tax form 1040 year 2008 S. Tax form 1040 year 2008 possessions and received Form W-2AS, Form W-2CM, Form W-2GU, or Form W-2VI, any uncollected taxes on tips will be shown in box 12 with codes A and B. Tax form 1040 year 2008 If you received Form 499R-2/W-2PR, any uncollected taxes will be shown in boxes 22 and 23. Tax form 1040 year 2008 Unlike the uncollected portion of the regular (1. Tax form 1040 year 2008 45%) Medicare tax, the uncollected Additional Medicare Tax is not reported on Form W-2. Tax form 1040 year 2008   To report these uncollected taxes, you must file a return even if you would not otherwise have to file. Tax form 1040 year 2008 You can report these taxes on Form 1040, in the space next to line 60; Form 1040NR, line 59; Form 1040-SS, Part I, line 6; or Form 1040-PR, Part I, line 6. Tax form 1040 year 2008 See the instructions for the appropriate form and line number indicated, and Form 8959. Tax form 1040 year 2008 (You cannot file Form 1040A, Form 1040EZ, or Form 1040NR-EZ. Tax form 1040 year 2008 ) Self-employed persons. Tax form 1040 year 2008    If you receive tips as a self-employed person, you should report these tips as income on Schedule C or C-EZ. Tax form 1040 year 2008 See Publication 334, Tax Guide for Small Business, for more information on reporting business income. Tax form 1040 year 2008 Allocated Tips If your employer allocated tips to you, they are shown separately in box 8 of your Form W-2. Tax form 1040 year 2008 They are not included in box 1 with your wages and reported tips. Tax form 1040 year 2008 If box 8 is blank, this discussion does not apply to you. Tax form 1040 year 2008 What are allocated tips. Tax form 1040 year 2008   These are tips that your employer assigned to you in addition to the tips you reported to your employer for the year. Tax form 1040 year 2008 Your employer will have done this only if: You worked in an establishment (restaurant, cocktail lounge, or similar business) that must allocate tips to employees, and The tips you reported to your employer were less than your share of 8% of food and drink sales. Tax form 1040 year 2008 No income, social security, Medicare, Additional Medicare, or railroad retirement taxes are withheld on allocated tips. Tax form 1040 year 2008 How were your allocated tips figured. Tax form 1040 year 2008   The tips allocated to you are your share of an amount figured by subtracting the reported tips of all employees from 8% (or an approved lower rate) of food and drink sales (other than carryout sales and sales with a service charge of 10% or more). Tax form 1040 year 2008 Your share of that amount was figured using either a method provided by an employer-employee agreement or a method provided by IRS regulations based on employees' sales or hours worked. Tax form 1040 year 2008 For information about the exact allocation method used, ask your employer. Tax form 1040 year 2008 Must you report your allocated tips on your tax return. Tax form 1040 year 2008   You must report tips you received in 2013 (including both cash and noncash tips) on your tax return as explained in What tips to report , earlier. Tax form 1040 year 2008 Any tips you reported to your employer in 2013 as required (explained under Reporting Tips to Your Employer , earlier) are included in the wages shown in box 1 of your Form W-2. Tax form 1040 year 2008 Add to the amount in box 1 only the tips you did not report to your employer as required. Tax form 1040 year 2008 This should include any allocated tips shown in box 8 on your Form(s) W-2, unless you have adequate records to show that you received less tips in the year than the allocated amount. Tax form 1040 year 2008   See What tips to report under Reporting Tips on Your Tax Return, and Keeping a Daily Tip Record , earlier. Tax form 1040 year 2008 How to report allocated tips. Tax form 1040 year 2008   If you received any tips in 2013 that you did not report to your employer as required (including allocated tips that you are required to report on your tax return), add these tips to the amount in box 1 of your Form(s) W-2 and report this amount as wages on Form 1040, line 7; Form 1040NR, line 8; or Form 1040NR-EZ, line 3. Tax form 1040 year 2008 (You cannot file Form 1040A or Form 1040EZ). Tax form 1040 year 2008    Because social security, Medicare, or Additional Medicare taxes were not withheld from the allocated tips, you must report those taxes as additional tax on your return. Tax form 1040 year 2008 Complete Form 4137 and include the allocated tips on line 1 of the form as provided in its instructions. Tax form 1040 year 2008 See Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, earlier. Tax form 1040 year 2008 How to request an approved lower rate. Tax form 1040 year 2008   Your employer can use a tip rate lower than 8% (but not lower than 2%) to figure allocated tips only if the IRS approves the lower rate. Tax form 1040 year 2008 Either the employer or the employees can request approval of a lower rate by filing a petition with the IRS. Tax form 1040 year 2008 The petition must include specific information about the establishment that will justify the lower rate. Tax form 1040 year 2008 A user fee must be paid with the petition. Tax form 1040 year 2008    An employee petition can be filed only with the consent of a majority of the directly tipped employees (waiters, bartenders, and others who receive tips directly from customers). Tax form 1040 year 2008 The petition must state the total number of directly tipped employees and the number of employees consenting to the petition. Tax form 1040 year 2008 Employees filing the petition must promptly notify the employer, and the employer must promptly give the IRS a copy of all Forms 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, filed for the establishment for the previous 3 years. Tax form 1040 year 2008   For more information about how to file a petition and what information to include, see Allocation of Tips in the Instructions for Form 8027. Tax form 1040 year 2008 How To Get Tax Help Go online, use a smart phone, call or walk in to an office near you. Tax form 1040 year 2008 Whether it's help with a tax issue, preparing your tax return or picking up a free publication or form, get the help you need the way you want it. Tax form 1040 year 2008 Free help with your tax return. Tax form 1040 year 2008   Free help in preparing your return is available nationwide from IRS-certified volunteers. Tax form 1040 year 2008 The Volunteer Income Tax Assistance (VITA) program is designed to help low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers. Tax form 1040 year 2008 The Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. Tax form 1040 year 2008 Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Tax form 1040 year 2008 Some VITA and TCE sites provide taxpayers the opportunity to prepare their return with the assistance of an IRS-certified volunteer. Tax form 1040 year 2008 To find the nearest VITA or TCE site, visit IRS. Tax form 1040 year 2008 gov or call 1-800-906-9887. Tax form 1040 year 2008   As part of the TCE program, AARP offers the Tax-Aide counseling program. Tax form 1040 year 2008 To find the nearest AARP Tax-Aide site, visit AARP's website at www. Tax form 1040 year 2008 aarp. Tax form 1040 year 2008 org/money/taxaide or call 1-888-227-7669. Tax form 1040 year 2008   For more information on these programs, go to IRS. Tax form 1040 year 2008 gov and enter “VITA” in the search box. Tax form 1040 year 2008 Internet. Tax form 1040 year 2008 IRS. Tax form 1040 year 2008 gov and IRS2Go are ready when you are — every day, every night, 24 hours a day, 7 days a week. Tax form 1040 year 2008 Apply for an Employer Identification Number (EIN). Tax form 1040 year 2008 Go to IRS. Tax form 1040 year 2008 gov and enter Apply for an EIN in the search box. Tax form 1040 year 2008 Request an Electronic Filing PIN by going to IRS. Tax form 1040 year 2008 gov and entering Electronic Filing PIN in the search box. Tax form 1040 year 2008 Check the status of your 2013 refund with Where's My Refund? Go to IRS. Tax form 1040 year 2008 gov or the IRS2Go app, and click on Where's My Refund? You'll get a personalized refund date as soon as the IRS processes your tax return and approves your refund. Tax form 1040 year 2008 If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Tax form 1040 year 2008 Check the status of your amended return. Tax form 1040 year 2008 Go to IRS. Tax form 1040 year 2008 gov and enter Where's My Amended Return in the search box. Tax form 1040 year 2008 Download forms, instructions, and publications, including some accessible versions. Tax form 1040 year 2008 Order free transcripts of your tax returns or tax account using the Order a Transcript tool on IRS. Tax form 1040 year 2008 gov or IRS2Go. Tax form 1040 year 2008 Tax return and tax account transcripts are generally available for the current year and past three years. Tax form 1040 year 2008 Figure your income tax withholding with the IRS Withholding Calculator on IRS. Tax form 1040 year 2008 gov. Tax form 1040 year 2008 Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Tax form 1040 year 2008 Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Tax form 1040 year 2008 gov. Tax form 1040 year 2008 Locate the nearest Taxpayer Assistance Center using the Office Locator tool on IRS. Tax form 1040 year 2008 gov or IRS2Go. Tax form 1040 year 2008 Stop by most business days for face-to-face tax help, no appointment necessary — just walk in. Tax form 1040 year 2008 An employee can explain IRS letters, request adjustments to your tax account or help you set up a payment plan. Tax form 1040 year 2008 Before you visit, check the Office Locator for the address, phone number, hours of operation and the services provided. Tax form 1040 year 2008 If you have an ongoing tax account problem or a special need, such as a disability, you can request an appointment. Tax form 1040 year 2008 Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Tax form 1040 year 2008 Locate the nearest volunteer help site with the VITA Locator Tool on IRS. Tax form 1040 year 2008 gov. Tax form 1040 year 2008 Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Tax form 1040 year 2008 The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. Tax form 1040 year 2008 Most VITA and TCE sites offer free electronic filing and some provide IRS-certified volunteers who can help prepare your tax return. Tax form 1040 year 2008 AARP offers the Tax-Aide counseling program as part of the TCE program. Tax form 1040 year 2008 Visit AARP's website to find the nearest Tax-Aide location. Tax form 1040 year 2008 Research your tax questions. Tax form 1040 year 2008 Search publications and instructions by topic or keyword. Tax form 1040 year 2008 Read the Internal Revenue Code, regulations, or other official guidance. Tax form 1040 year 2008 Read Internal Revenue Bulletins. Tax form 1040 year 2008 Sign up to receive local and national tax news by email. Tax form 1040 year 2008 Phone. Tax form 1040 year 2008 You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Tax form 1040 year 2008 Download the free IRS2Go mobile app from the iTunes app store or from Google Play. Tax form 1040 year 2008 Use it to watch the IRS YouTube channel, get IRS news as soon as it's released to the public, order transcripts of your tax returns or tax account, check your refund status, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Tax form 1040 year 2008 Call to locate the nearest volunteer help site, 1-800-906-9887. Tax form 1040 year 2008 Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Tax form 1040 year 2008 The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. Tax form 1040 year 2008 Most VITA and TCE sites offer free electronic filing. Tax form 1040 year 2008 Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Tax form 1040 year 2008 Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Tax form 1040 year 2008 Call to check the status of your 2013 refund, 1-800-829-1954 or 1-800-829-4477. Tax form 1040 year 2008 The automated Where's My Refund? information is available 24 hours a day, 7 days a week. Tax form 1040 year 2008 If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Tax form 1040 year 2008 Before you call, have your 2013 tax return handy so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Tax form 1040 year 2008 Where's My Refund? can give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Tax form 1040 year 2008 Where's My Refund? includes information for the most recent return filed in the current year and does not include information about amended returns. Tax form 1040 year 2008 Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Tax form 1040 year 2008 Call to order forms, instructions and publications, 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions and publications, and prior-year forms and instructions (limited to 5 years). Tax form 1040 year 2008 You should receive your order within 10 business days. Tax form 1040 year 2008 Call to order transcripts of your tax returns or tax account, 1-800-908-9946. Tax form 1040 year 2008 Follow the prompts to provide your Social Security Number or Individual Taxpayer Identification Number, date of birth, street address and ZIP code. Tax form 1040 year 2008 Call for TeleTax topics, 1-800-829-4477, to listen to pre-recorded messages covering various tax topics. Tax form 1040 year 2008 Call to ask tax questions, 1-800-829-1040. Tax form 1040 year 2008 Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Tax form 1040 year 2008 The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Tax form 1040 year 2008 These individuals can also contact the IRS through relay services such as the Federal Relay Service available at www. Tax form 1040 year 2008 gsa. Tax form 1040 year 2008 gov/fedrelay. Tax form 1040 year 2008 Walk-in. Tax form 1040 year 2008 You can find a selection of forms, publications and services — in-person, face-to-face. Tax form 1040 year 2008 Products. Tax form 1040 year 2008 You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Tax form 1040 year 2008 Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Tax form 1040 year 2008 Services. Tax form 1040 year 2008 You can walk in to your local TAC most business days for personal, face-to-face tax help. Tax form 1040 year 2008 An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. Tax form 1040 year 2008 If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local TAC where you can talk with an IRS representative face-to-face. Tax form 1040 year 2008 No appointment is necessary—just walk in. Tax form 1040 year 2008 Before visiting, check www. Tax form 1040 year 2008 irs. Tax form 1040 year 2008 gov/localcontacts for hours of operation and services provided. Tax form 1040 year 2008 Mail. Tax form 1040 year 2008 You can send your order for forms, instructions, and publications to the address below. Tax form 1040 year 2008 You should receive a response within 10 business days after your request is received. Tax form 1040 year 2008  Internal Revenue Service 1201 N. Tax form 1040 year 2008 Mitsubishi Motorway Bloomington, IL 61705-6613 The Taxpayer Advocate Service Is Here to Help You. Tax form 1040 year 2008   The Taxpayer Advocate Service (TAS) is your voice at the IRS. Tax form 1040 year 2008 Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Tax form 1040 year 2008 What can TAS do for you?   We can offer you free help with IRS problems that you can't resolve on your own. Tax form 1040 year 2008 We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Tax form 1040 year 2008 You face (or your business is facing) an immediate threat of adverse action. Tax form 1040 year 2008 You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Tax form 1040 year 2008   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Tax form 1040 year 2008 Here's why we can help: TAS is an independent organization within the IRS. Tax form 1040 year 2008 Our advocates know how to work with the IRS. Tax form 1040 year 2008 Our services are free and tailored to meet your needs. Tax form 1040 year 2008 We have offices in every state, the District of Columbia, and Puerto Rico. Tax form 1040 year 2008 How can you reach us?   If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. Tax form 1040 year 2008 irs. Tax form 1040 year 2008 gov/advocate, or call us toll-free at 1-877-777-4778. Tax form 1040 year 2008 How else does TAS help taxpayers?   TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Tax form 1040 year 2008 If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. Tax form 1040 year 2008 irs. Tax form 1040 year 2008 gov/sams. Tax form 1040 year 2008 Low Income Taxpayer Clinics. Tax form 1040 year 2008   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. Tax form 1040 year 2008 Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Tax form 1040 year 2008 Visit www. Tax form 1040 year 2008 TaxpayerAdvocate. Tax form 1040 year 2008 irs. Tax form 1040 year 2008 gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. Tax form 1040 year 2008 Prev  Up  Next   Home   More Online Publications
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PTIN Requirements for Tax Return Preparers


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PTIN renewal and registration for 2014 are still available. 

Anyone who prepares or assists in preparing federal tax returns for compensation must have a valid 2014 PTIN before preparing returns. All enrolled agents must also have a PTIN.

PTIN requirements are not affected by recent litigation.

 

 

 

 

Renew your PTIN in 3 easy steps:

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2. Renew Your PTIN

Complete the online renewal application. You must verify your personal information and answer a few new questions. View a checklist of what you need before you get started.

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Pay the $63.00 renewal fee via credit card or direct debit.

Don't have a PTIN and need to obtain one?
Most first-time PTIN applicants can obtain a PTIN online in about 15 minutes. The fee is $64.25. View this checklist to get started.

Prefer to apply or renew by paper?
It only takes about 15 minutes to apply for or renew your PTIN online. But if you prefer to use the paper option, Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application, it will take 4-6 weeks to process.

 

Page Last Reviewed or Updated: 10-Mar-2014

The Tax Form 1040 Year 2008

Tax form 1040 year 2008 Publication 551 - Main Content Table of Contents Cost BasisStocks and Bonds Real Property Business Assets Allocating the Basis Adjusted BasisIncreases to Basis Decreases to Basis Adjustments to Basis Example Basis Other Than CostProperty Received for Services Taxable Exchanges Nontaxable Exchanges Property Transferred From a Spouse Property Received as a Gift Inherited Property Property Changed to Business or Rental Use How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Tax form 1040 year 2008 Cost Basis The basis of property you buy is usually its cost. Tax form 1040 year 2008 The cost is the amount you pay in cash, debt obligations, other property, or services. Tax form 1040 year 2008 Your cost also includes amounts you pay for the following items. Tax form 1040 year 2008 Sales tax, Freight, Installation and testing, Excise taxes, Legal and accounting fees (when they must be capitalized), Revenue stamps, Recording fees, and Real estate taxes (if assumed for the seller). Tax form 1040 year 2008  You may also have to capitalize (add to basis) certain other costs related to buying or producing property. Tax form 1040 year 2008 Loans with low or no interest. Tax form 1040 year 2008   If you buy property on a time-payment plan that charges little or no interest, the basis of your property is your stated purchase price, minus the amount considered to be unstated interest. Tax form 1040 year 2008 You generally have unstated interest if your interest rate is less than the applicable federal rate. Tax form 1040 year 2008 For more information, see Unstated Interest and Original Issue Discount in Publication 537. Tax form 1040 year 2008 Purchase of a business. Tax form 1040 year 2008   When you purchase a trade or business, you generally purchase all assets used in the business operations, such as land, buildings, and machinery. Tax form 1040 year 2008 Allocate the price among the various assets, including any section 197 intangibles. Tax form 1040 year 2008 See Allocating the Basis, later. Tax form 1040 year 2008 Stocks and Bonds The basis of stocks or bonds you buy is generally the purchase price plus any costs of purchase, such as commissions and recording or transfer fees. Tax form 1040 year 2008 If you get stocks or bonds other than by purchase, your basis is usually determined by the fair market value (FMV) or the previous owner's adjusted basis of the stock. Tax form 1040 year 2008 You must adjust the basis of stocks for certain events that occur after purchase. Tax form 1040 year 2008 See Stocks and Bonds in chapter 4 of Publication 550 for more information on the basis of stock. Tax form 1040 year 2008 Identifying stock or bonds sold. Tax form 1040 year 2008   If you can adequately identify the shares of stock or the bonds you sold, their basis is the cost or other basis of the particular shares of stock or bonds. Tax form 1040 year 2008 If you buy and sell securities at various times in varying quantities and you cannot adequately identify the shares you sell, the basis of the securities you sell is the basis of the securities you acquired first. Tax form 1040 year 2008 For more information about identifying securities you sell, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. Tax form 1040 year 2008 Mutual fund shares. Tax form 1040 year 2008   If you sell mutual fund shares acquired at different times and prices, you can choose to use an average basis. Tax form 1040 year 2008 For more information, see Publication 550. Tax form 1040 year 2008 Real Property Real property, also called real estate, is land and generally anything built on or attached to it. Tax form 1040 year 2008 If you buy real property, certain fees and other expenses become part of your cost basis in the property. Tax form 1040 year 2008 Real estate taxes. Tax form 1040 year 2008   If you pay real estate taxes the seller owed on real property you bought, and the seller did not reimburse you, treat those taxes as part of your basis. Tax form 1040 year 2008 You cannot deduct them as taxes. Tax form 1040 year 2008   If you reimburse the seller for taxes the seller paid for you, you can usually deduct that amount as an expense in the year of purchase. Tax form 1040 year 2008 Do not include that amount in the basis of the property. Tax form 1040 year 2008 If you did not reimburse the seller, you must reduce your basis by the amount of those taxes. Tax form 1040 year 2008 Settlement costs. Tax form 1040 year 2008   Your basis includes the settlement fees and closing costs for buying property. Tax form 1040 year 2008 You cannot include in your basis the fees and costs for getting a loan on property. Tax form 1040 year 2008 A fee for buying property is a cost that must be paid even if you bought the property for cash. Tax form 1040 year 2008   The following items are some of the settlement fees or closing costs you can include in the basis of your property. Tax form 1040 year 2008 Abstract fees (abstract of title fees); Charges for installing utility services; Legal fees (including title search and preparation of the sales contract and deed); Recording fees; Surveys; Transfer taxes; Owner's title insurance; and Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. Tax form 1040 year 2008   Settlement costs do not include amounts placed in escrow for the future payment of items such as taxes and insurance. Tax form 1040 year 2008   The following items are some settlement fees and closing costs you cannot include in the basis of the property. Tax form 1040 year 2008 Casualty insurance premiums. Tax form 1040 year 2008 Rent for occupancy of the property before closing. Tax form 1040 year 2008 Charges for utilities or other services related to occupancy of the property before closing. Tax form 1040 year 2008 Charges connected with getting a loan. Tax form 1040 year 2008 The following are examples of these charges. Tax form 1040 year 2008 Points (discount points, loan origination fees). Tax form 1040 year 2008 Mortgage insurance premiums. Tax form 1040 year 2008 Loan assumption fees. Tax form 1040 year 2008 Cost of a credit report. Tax form 1040 year 2008 Fees for an appraisal required by a lender. Tax form 1040 year 2008 Fees for refinancing a mortgage. Tax form 1040 year 2008 If these costs relate to business property, items (1) through (3) are deductible as business expenses. Tax form 1040 year 2008 Items (4) and (5) must be capitalized as costs of getting a loan and can be deducted over the period of the loan. Tax form 1040 year 2008 Points. Tax form 1040 year 2008   If you pay points to obtain a loan (including a mortgage, second mortgage, line of credit, or a home equity loan), do not add the points to the basis of the related property. Tax form 1040 year 2008 Generally, you deduct the points over the term of the loan. Tax form 1040 year 2008 For more information on how to deduct points, see Points in chapter 4 of Publication 535. Tax form 1040 year 2008 Points on home mortgage. Tax form 1040 year 2008   Special rules may apply to points you and the seller pay when you obtain a mortgage to purchase your main home. Tax form 1040 year 2008 If certain requirements are met, you can deduct the points in full for the year in which they are paid. Tax form 1040 year 2008 Reduce the basis of your home by any seller-paid points. Tax form 1040 year 2008 For more information, see Points in Publication 936, Home Mortgage Interest Deduction. Tax form 1040 year 2008 Assumption of mortgage. Tax form 1040 year 2008   If you buy property and assume (or buy subject to) an existing mortgage on the property, your basis includes the amount you pay for the property plus the amount to be paid on the mortgage. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 If you buy a building for $20,000 cash and assume a mortgage of $80,000 on it, your basis is $100,000. Tax form 1040 year 2008 Constructing assets. Tax form 1040 year 2008   If you build property or have assets built for you, your expenses for this construction are part of your basis. Tax form 1040 year 2008 Some of these expenses include the following costs. Tax form 1040 year 2008 Land, Labor and materials, Architect's fees, Building permit charges, Payments to contractors, Payments for rental equipment, and Inspection fees. Tax form 1040 year 2008 In addition, if you own a business and use your employees, material, and equipment to build an asset, do not deduct the following expenses. Tax form 1040 year 2008 You must include them in the asset's basis. Tax form 1040 year 2008 Employee wages paid for the construction work, reduced by any employment credits allowed; Depreciation on equipment you own while it is used in the construction; Operating and maintenance costs for equipment used in the construction; and The cost of business supplies and materials used in the construction. Tax form 1040 year 2008    Do not include the value of your own labor, or any other labor you did not pay for, in the basis of any property you construct. Tax form 1040 year 2008 Business Assets If you purchase property to use in your business, your basis is usually its actual cost to you. Tax form 1040 year 2008 If you construct, create, or otherwise produce property, you must capitalize the costs as your basis. Tax form 1040 year 2008 In certain circumstances, you may be subject to the uniform capitalization rules, next. Tax form 1040 year 2008 Uniform Capitalization Rules The uniform capitalization rules specify the costs you add to basis in certain circumstances. Tax form 1040 year 2008 Activities subject to the rules. Tax form 1040 year 2008   You must use the uniform capitalization rules if you do any of the following in your trade or business or activity carried on for profit. Tax form 1040 year 2008 Produce real or tangible personal property for use in the business or activity, Produce real or tangible personal property for sale to customers, or Acquire property for resale. Tax form 1040 year 2008 However, this rule does not apply to personal property if your average annual gross receipts for the 3 previous tax years are $10 million or less. Tax form 1040 year 2008   You produce property if you construct, build, install, manufacture, develop, improve, create, raise, or grow the property. Tax form 1040 year 2008 Treat property produced for you under a contract as produced by you up to the amount you pay or costs you otherwise incur for the property. Tax form 1040 year 2008 Tangible personal property includes films, sound recordings, video tapes, books, or similar property. Tax form 1040 year 2008    Under the uniform capitalization rules, you must capitalize all direct costs and an allocable part of most indirect costs you incur due to your production or resale activities. Tax form 1040 year 2008 To capitalize means to include certain expenses in the basis of property you produce or in your inventory costs rather than deduct them as a current expense. Tax form 1040 year 2008 You recover these costs through deductions for depreciation, amortization, or cost of goods sold when you use, sell, or otherwise dispose of the property. Tax form 1040 year 2008   Any cost you cannot use to figure your taxable income for any tax year is not subject to the uniform capitalization rules. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 If you incur a business meal expense for which your deduction would be limited to 50% of the cost of the meal, that amount is subject to the uniform capitalization rules. Tax form 1040 year 2008 The nondeductible part of the cost is not subject to the uniform capitalization rules. Tax form 1040 year 2008 More information. Tax form 1040 year 2008   For more information about these rules, see the regulations under section 263A of the Internal Revenue Code and Publication 538, Accounting Periods and Methods. Tax form 1040 year 2008 Exceptions. Tax form 1040 year 2008   The following are not subject to the uniform capitalization rules. Tax form 1040 year 2008 Property you produce that you do not use in your trade, business, or activity conducted for profit; Qualified creative expenses you pay or incur as a free-lance (self-employed) writer, photographer, or artist that are otherwise deductible on your tax return; Property you produce under a long-term contract, except for certain home construction contracts; Research and experimental expenses deductible under section 174 of the Internal Revenue Code; and Costs for personal property acquired for resale if your (or your predecessor's) average annual gross receipts for the 3 previous tax years do not exceed $10 million. Tax form 1040 year 2008 For other exceptions to the uniform capitalization rules, see section 1. Tax form 1040 year 2008 263A-1(b) of the regulations. Tax form 1040 year 2008   For information on the special rules that apply to costs incurred in the business of farming, see chapter 6 of Publication 225, Farmer's Tax Guide. Tax form 1040 year 2008 Intangible Assets Intangible assets include goodwill, patents, copyrights, trademarks, trade names, and franchises. Tax form 1040 year 2008 The basis of an intangible asset is usually the cost to buy or create it. Tax form 1040 year 2008 If you acquire multiple assets, for example a going business for a lump sum, see Allocating the Basis below to figure the basis of the individual assets. Tax form 1040 year 2008 The basis of certain intangibles can be amortized. Tax form 1040 year 2008 See chapter 8 of Publication 535 for information on the amortization of these costs. Tax form 1040 year 2008 Patents. Tax form 1040 year 2008   The basis of a patent you get for an invention is the cost of development, such as research and experimental expenditures, drawings, working models, and attorneys' and governmental fees. Tax form 1040 year 2008 If you deduct the research and experimental expenditures as current business expenses, you cannot include them in the basis of the patent. Tax form 1040 year 2008 The value of the inventor's time spent on an invention is not part of the basis. Tax form 1040 year 2008 Copyrights. Tax form 1040 year 2008   If you are an author, the basis of a copyright will usually be the cost of getting the copyright plus copyright fees, attorneys' fees, clerical assistance, and the cost of plates that remain in your possession. Tax form 1040 year 2008 Do not include the value of your time as the author, or any other person's time you did not pay for. Tax form 1040 year 2008 Franchises, trademarks, and trade names. Tax form 1040 year 2008   If you buy a franchise, trademark, or trade name, the basis is its cost, unless you can deduct your payments as a business expense. Tax form 1040 year 2008 Allocating the Basis If you buy multiple assets for a lump sum, allocate the amount you pay among the assets you receive. Tax form 1040 year 2008 You must make this allocation to figure your basis for depreciation and gain or loss on a later disposition of any of these assets. Tax form 1040 year 2008 See Trade or Business Acquired below. Tax form 1040 year 2008 Group of Assets Acquired If you buy multiple assets for a lump sum, you and the seller may agree to a specific allocation of the purchase price among the assets in the sales contract. Tax form 1040 year 2008 If this allocation is based on the value of each asset and you and the seller have adverse tax interests, the allocation generally will be accepted. Tax form 1040 year 2008 However, see Trade or Business Acquired, next. Tax form 1040 year 2008 Trade or Business Acquired If you acquire a trade or business, allocate the consideration paid to the various assets acquired. Tax form 1040 year 2008 Generally, reduce the consideration paid by any cash and general deposit accounts (including checking and savings accounts) received. Tax form 1040 year 2008 Allocate the remaining consideration to the other business assets received in proportion to (but not more than) their fair market value in the following order. Tax form 1040 year 2008 Certificates of deposit, U. Tax form 1040 year 2008 S. Tax form 1040 year 2008 Government securities, foreign currency, and actively traded personal property, including stock and securities. Tax form 1040 year 2008 Accounts receivable, other debt instruments, and assets you mark to market at least annually for federal income tax purposes. Tax form 1040 year 2008 Property of a kind that would properly be included in inventory if on hand at the end of the tax year or property held primarily for sale to customers in the ordinary course of business. Tax form 1040 year 2008 All other assets except section 197 intangibles, goodwill, and going concern value. Tax form 1040 year 2008 Section 197 intangibles except goodwill and going concern value. Tax form 1040 year 2008 Goodwill and going concern value (whether or not they qualify as section 197 intangibles). Tax form 1040 year 2008 Agreement. Tax form 1040 year 2008   The buyer and seller may enter into a written agreement as to the allocation of any consideration or the fair market value (FMV) of any of the assets. Tax form 1040 year 2008 This agreement is binding on both parties unless the IRS determines the amounts are not appropriate. Tax form 1040 year 2008 Reporting requirement. Tax form 1040 year 2008   Both the buyer and seller involved in the sale of business assets must report to the IRS the allocation of the sales price among section 197 intangibles and the other business assets. Tax form 1040 year 2008 Use Form 8594 to provide this information. Tax form 1040 year 2008 The buyer and seller should each attach Form 8594 to their federal income tax return for the year in which the sale occurred. Tax form 1040 year 2008 More information. Tax form 1040 year 2008   See Sale of a Business in chapter 2 of Publication 544 for more information. Tax form 1040 year 2008 Land and Buildings If you buy buildings and the land on which they stand for a lump sum, allocate the basis of the property among the land and the buildings so you can figure the depreciation allowable on the buildings. Tax form 1040 year 2008 Figure the basis of each asset by multiplying the lump sum by a fraction. Tax form 1040 year 2008 The numerator is the FMV of that asset and the denominator is the FMV of the whole property at the time of purchase. Tax form 1040 year 2008 If you are not certain of the FMV of the land and buildings, you can allocate the basis based on their assessed values for real estate tax purposes. Tax form 1040 year 2008 Demolition of building. Tax form 1040 year 2008   Add demolition costs and other losses incurred for the demolition of any building to the basis of the land on which the demolished building was located. Tax form 1040 year 2008 Do not claim the costs as a current deduction. Tax form 1040 year 2008 Modification of building. Tax form 1040 year 2008   A modification of a building will not be treated as a demolition if the following conditions are satisfied. Tax form 1040 year 2008 75 percent or more of the existing external walls of the building are retained in place as internal or external walls, and 75 percent or more of the existing internal structural framework of the building is retained in place. Tax form 1040 year 2008   If the building is a certified historic structure, the modification must also be part of a certified rehabilitation. Tax form 1040 year 2008   If these conditions are met, add the costs of the modifications to the basis of the building. Tax form 1040 year 2008 Subdivided lots. Tax form 1040 year 2008   If you buy a tract of land and subdivide it, you must determine the basis of each lot. Tax form 1040 year 2008 This is necessary because you must figure the gain or loss on the sale of each individual lot. Tax form 1040 year 2008 As a result, you do not recover your entire cost in the tract until you have sold all of the lots. Tax form 1040 year 2008   To determine the basis of an individual lot, multiply the total cost of the tract by a fraction. Tax form 1040 year 2008 The numerator is the FMV of the lot and the denominator is the FMV of the entire tract. Tax form 1040 year 2008 Future improvement costs. Tax form 1040 year 2008   If you are a developer and sell subdivided lots before the development work is completed, you can (with IRS consent) include in the basis of the properties sold an allocation of the estimated future cost for common improvements. Tax form 1040 year 2008 See Revenue Procedure 92–29 for more information, including an explanation of the procedures for getting consent from the IRS. Tax form 1040 year 2008 Use of erroneous cost basis. Tax form 1040 year 2008   If you made a mistake in figuring the cost basis of subdivided lots sold in previous years, you cannot correct the mistake for years for which the statute of limitations (generally 3 tax years) has expired. Tax form 1040 year 2008 Figure the basis of any remaining lots by allocating the correct original cost basis of the entire tract among the original lots. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 You bought a tract of land to which you assigned a cost of $15,000. Tax form 1040 year 2008 You subdivided the land into 15 building lots of equal size and equitably divided your basis so that each lot had a basis of $1,000. Tax form 1040 year 2008 You treated the sale of each lot as a separate transaction and figured gain or loss separately on each sale. Tax form 1040 year 2008 Several years later you determine that your original basis in the tract was $22,500 and not $15,000. Tax form 1040 year 2008 You sold eight lots using $8,000 of basis in years for which the statute of limitations has expired. Tax form 1040 year 2008 You now can take $1,500 of basis into account for figuring gain or loss only on the sale of each of the remaining seven lots ($22,500 basis divided among all 15 lots). Tax form 1040 year 2008 You cannot refigure the basis of the eight lots sold in tax years barred by the statute of limitations. Tax form 1040 year 2008 Adjusted Basis Before figuring gain or loss on a sale, exchange, or other disposition of property or figuring allowable depreciation, depletion, or amortization, you must usually make certain adjustments to the basis of the property. Tax form 1040 year 2008 The result of these adjustments to the basis is the adjusted basis. Tax form 1040 year 2008 Increases to Basis Increase the basis of any property by all items properly added to a capital account. Tax form 1040 year 2008 These include the cost of any improvements having a useful life of more than 1 year. Tax form 1040 year 2008 Rehabilitation expenses also increase basis. Tax form 1040 year 2008 However, you must subtract any rehabilitation credit allowed for these expenses before you add them to your basis. Tax form 1040 year 2008 If you have to recapture any of the credit, increase your basis by the recaptured amount. Tax form 1040 year 2008 If you make additions or improvements to business property, keep separate accounts for them. Tax form 1040 year 2008 Also, you must depreciate the basis of each according to the depreciation rules that would apply to the underlying property if you had placed it in service at the same time you placed the addition or improvement in service. Tax form 1040 year 2008 For more information, see Publication 946. Tax form 1040 year 2008 The following items increase the basis of property. Tax form 1040 year 2008 The cost of extending utility service lines to the property; Impact fees; Legal fees, such as the cost of defending and perfecting title; Legal fees for obtaining a decrease in an assessment levied against property to pay for local improvements; Zoning costs; and The capitalized value of a redeemable ground rent. Tax form 1040 year 2008 Assessments for Local Improvements Increase the basis of property by assessments for items such as paving roads and building ditches that increase the value of the property assessed. Tax form 1040 year 2008 Do not deduct them as taxes. Tax form 1040 year 2008 However, you can deduct as taxes charges for maintenance, repairs, or interest charges related to the improvements. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 Your city changes the street in front of your store into an enclosed pedestrian mall and assesses you and other affected landowners for the cost of the conversion. Tax form 1040 year 2008 Add the assessment to your property's basis. Tax form 1040 year 2008 In this example, the assessment is a depreciable asset. Tax form 1040 year 2008 Deducting vs. Tax form 1040 year 2008 Capitalizing Costs Do not add to your basis costs you can deduct as current expenses. Tax form 1040 year 2008 For example, amounts paid for incidental repairs or maintenance that are deductible as business expenses cannot be added to basis. Tax form 1040 year 2008 However, you can choose either to deduct or to capitalize certain other costs. Tax form 1040 year 2008 If you capitalize these costs, include them in your basis. Tax form 1040 year 2008 If you deduct them, do not include them in your basis. Tax form 1040 year 2008 See Uniform Capitalization Rules earlier. Tax form 1040 year 2008 The costs you can choose to deduct or to capitalize include the following. Tax form 1040 year 2008 Carrying charges, such as interest and taxes, that you pay to own property, except carrying charges that must be capitalized under the uniform capitalization rules; Research and experimentation costs; Intangible drilling and development costs for oil, gas, and geothermal wells; Exploration costs for new mineral deposits; Mining development costs for a new mineral deposit; Costs of establishing, maintaining, or increasing the circulation of a newspaper or other periodical; and Costs of removing architectural and transportation barriers to people with disabilities and the elderly. Tax form 1040 year 2008 If you claim the disabled access credit, you must reduce the amount you deduct or capitalize by the amount of the credit. Tax form 1040 year 2008 For more information about deducting or capitalizing costs, see chapter 7 in Publication 535. Tax form 1040 year 2008 Table 1. Tax form 1040 year 2008 Examples of Increases and Decreases to Basis Increases to Basis Decreases to Basis Capital improvements:   Putting an addition on your home   Replacing an entire roof  Paving your driveway  Installing central air conditioning Rewiring your home Exclusion from income of subsidies for energy conservation measures  Casualty or theft loss deductions and insurance reimbursements  Vehicle credits Assessments for local improvements: Water connections Sidewalks Roads Section 179 deduction  Casualty losses: Restoring damaged property Depreciation  Nontaxable corporate distributions Legal fees:  Cost of defending and perfecting a title   Zoning costs   Decreases to Basis The following are some items that reduce the basis of property. Tax form 1040 year 2008 Section 179 deduction; Nontaxable corporate distributions; Deductions previously allowed (or allowable) for amortization, depreciation, and depletion; Exclusion of subsidies for energy conservation measures; Vehicle credits; Residential energy credits; Postponed gain from sale of home; Investment credit (part or all) taken; Casualty and theft losses and insurance reimbursement; Certain canceled debt excluded from income; Rebates from a manufacturer or seller; Easements; Gas-guzzler tax; Adoption tax benefits; and Credit for employer-provided child care. Tax form 1040 year 2008 Some of these items are discussed next. Tax form 1040 year 2008 Casualties and Thefts If you have a casualty or theft loss, decrease the basis in your property by any insurance or other reimbursement and by any deductible loss not covered by insurance. Tax form 1040 year 2008 You must increase your basis in the property by the amount you spend on repairs that substantially prolong the life of the property, increase its value, or adapt it to a different use. Tax form 1040 year 2008 To make this determination, compare the repaired property to the property before the casualty. Tax form 1040 year 2008 For more information on casualty and theft losses, see Publication 547, Casualties, Disasters, and Thefts. Tax form 1040 year 2008 Easements The amount you receive for granting an easement is generally considered to be a sale of an interest in real property. Tax form 1040 year 2008 It reduces the basis of the affected part of the property. Tax form 1040 year 2008 If the amount received is more than the basis of the part of the property affected by the easement, reduce your basis in that part to zero and treat the excess as a recognized gain. Tax form 1040 year 2008 Vehicle Credits Unless you elect not to claim the qualified plug-in electric vehicle credit, the alternative motor vehicle credit, or the qualified plug-in electric drive motor vehicle credit, you may have to reduce the basis of each qualified vehicle by certain amounts reported. Tax form 1040 year 2008 For more information, see Form 8834, Qualified Plug-in Electric and Electric Vehicle Credit; Form 8910, Alternative Motor Vehicle Credit; Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit;and the related instructions. Tax form 1040 year 2008 Gas-Guzzler Tax Decrease the basis in your car by the gas-guzzler (fuel economy) tax if you begin using the car within 1 year of the date of its first sale for ultimate use. Tax form 1040 year 2008 This rule also applies to someone who later buys the car and begins using it not more than 1 year after the original sale for ultimate use. Tax form 1040 year 2008 If the car is imported, the one-year period begins on the date of entry or withdrawal of the car from the warehouse if that date is later than the date of the first sale for ultimate use. Tax form 1040 year 2008 Section 179 Deduction If you take the section 179 deduction for all or part of the cost of qualifying business property, decrease the basis of the property by the deduction. Tax form 1040 year 2008 For more information about the section 179 deduction, see Publication 946. Tax form 1040 year 2008 Exclusion of Subsidies for Energy Conservation Measures You can exclude from gross income any subsidy you received from a public utility company for the purchase or installation of any energy conservation measure for a dwelling unit. Tax form 1040 year 2008 Reduce the basis of the property for which you received the subsidy by the excluded amount. Tax form 1040 year 2008 For more information on this subsidy, see Publication 525. Tax form 1040 year 2008 Depreciation Decrease the basis of property by the depreciation you deducted, or could have deducted, on your tax returns under the method of depreciation you chose. Tax form 1040 year 2008 If you took less depreciation than you could have under the method chosen, decrease the basis by the amount you could have taken under that method. Tax form 1040 year 2008 If you did not take a depreciation deduction, reduce the basis by the full amount of the depreciation you could have taken. Tax form 1040 year 2008 Unless a timely election is made not to deduct the special depreciation allowance for property placed in service after September 10, 2001, decrease the property's basis by the special depreciation allowance you deducted or could have deducted. Tax form 1040 year 2008 If you deducted more depreciation than you should have, decrease your basis by the amount equal to the depreciation you should have deducted plus the part of the excess depreciation you deducted that actually reduced your tax liability for the year. Tax form 1040 year 2008 In decreasing your basis for depreciation, take into account the amount deducted on your tax returns as depreciation and any depreciation capitalized under the uniform capitalization rules. Tax form 1040 year 2008 For information on figuring depreciation, see Publication 946. Tax form 1040 year 2008 If you are claiming depreciation on a business vehicle, see Publication 463. Tax form 1040 year 2008 If the car is not used more than 50% for business during the tax year, you may have to recapture excess depreciation. Tax form 1040 year 2008 Include the excess depreciation in your gross income and add it to your basis in the property. Tax form 1040 year 2008 For information on the computation of excess depreciation, see chapter 4 in Publication 463. Tax form 1040 year 2008 Canceled Debt Excluded From Income If a debt you owe is canceled or forgiven, other than as a gift or bequest, you generally must include the canceled amount in your gross income for tax purposes. Tax form 1040 year 2008 A debt includes any indebtedness for which you are liable or which attaches to property you hold. Tax form 1040 year 2008 You can exclude canceled debt from income in the following situations. Tax form 1040 year 2008 Debt canceled in a bankruptcy case or when you are insolvent, Qualified farm debt, and Qualified real property business debt (provided you are not a C corporation). Tax form 1040 year 2008 If you exclude from income canceled debt under situation (1) or (2), you may have to reduce the basis of your depreciable and nondepreciable property. Tax form 1040 year 2008 However, in situation (3), you must reduce the basis of your depreciable property by the excluded amount. Tax form 1040 year 2008 For more information about canceled debt in a bankruptcy case or during insolvency, see Publication 908, Bankruptcy Tax Guide. Tax form 1040 year 2008 For more information about canceled debt that is qualified farm debt, see chapter 3 in Publication 225. Tax form 1040 year 2008 For more information about qualified real property business debt, see chapter 5 in Publication 334, Tax Guide for Small Business. Tax form 1040 year 2008 Postponed Gain From Sale of Home If you postponed gain from the sale of your main home before May 7, 1997, you must reduce the basis of your new home by the postponed gain. Tax form 1040 year 2008 For more information on the rules for the sale of a home, see Publication 523. Tax form 1040 year 2008 Adoption Tax Benefits If you claim an adoption credit for the cost of improvements you added to the basis of your home, decrease the basis of your home by the credit allowed. Tax form 1040 year 2008 This also applies to amounts you received under an employer's adoption assistance program and excluded from income. Tax form 1040 year 2008 For more information Form 8839, Qualified Adoption Expenses. Tax form 1040 year 2008 Employer-Provided Child Care If you are an employer, you can claim the employer-provided child care credit on amounts you paid or incurred to acquire, construct, rehabilitate, or expand property used as part of your qualified child care facility. Tax form 1040 year 2008 You must reduce your basis in that property by the credit claimed. Tax form 1040 year 2008 For more information, see Form 8882, Credit for Employer-Provided Child Care Facilities and Services. Tax form 1040 year 2008 Adjustments to Basis Example In January 2005, you paid $80,000 for real property to be used as a factory. Tax form 1040 year 2008 You also paid commissions of $2,000 and title search and legal fees of $600. Tax form 1040 year 2008 You allocated the total cost of $82,600 between the land and the building—$10,325 for the land and $72,275 for the building. Tax form 1040 year 2008 Immediately you spent $20,000 in remodeling the building before you placed it in service. Tax form 1040 year 2008 You were allowed depreciation of $14,526 for the years 2005 through 2009. Tax form 1040 year 2008 In 2008 you had a $5,000 casualty loss from a that was not covered by insurance on the building. Tax form 1040 year 2008 You claimed a deduction for this loss. Tax form 1040 year 2008 You spent $5,500 to repair the damages and extend the useful life of the building. Tax form 1040 year 2008 The adjusted basis of the building on January 1, 2010, is figured as follows: Original cost of building including fees and commissions $72,275 Adjustments to basis:     Add:         Improvements 20,000   Repair of damages 5,500       $97,775 Subtract:       Depreciation $14,526     Deducted casualty loss 5,000 19,526 Adjusted basis on January 1, 2010 $78,249 The basis of the land, $10,325, remains unchanged. Tax form 1040 year 2008 It is not affected by any of the above adjustments. Tax form 1040 year 2008 Basis Other Than Cost There are many times when you cannot use cost as basis. Tax form 1040 year 2008 In these cases, the fair market value or the adjusted basis of property may be used. Tax form 1040 year 2008 Adjusted basis is discussed earlier. Tax form 1040 year 2008 Fair market value (FMV). Tax form 1040 year 2008   FMV is the price at which property would change hands between a buyer and a seller, neither having to buy or sell, and both having reasonable knowledge of all necessary facts. Tax form 1040 year 2008 Sales of similar property on or about the same date may be helpful in figuring the property's FMV. Tax form 1040 year 2008 Property Received for Services If you receive property for services, include the property's FMV in income. Tax form 1040 year 2008 The amount you include in income becomes your basis. Tax form 1040 year 2008 If the services were performed for a price agreed on beforehand, it will be accepted as the FMV of the property if there is no evidence to the contrary. Tax form 1040 year 2008 Bargain Purchases A bargain purchase is a purchase of an item for less than its FMV. Tax form 1040 year 2008 If, as compensation for services, you purchase goods or other property at less than FMV, include the difference between the purchase price and the property's FMV in your income. Tax form 1040 year 2008 Your basis in the property is its FMV (your purchase price plus the amount you include in income). Tax form 1040 year 2008 If the difference between your purchase price and the FMV represents a qualified employee discount, do not include the difference in income. Tax form 1040 year 2008 However, your basis in the property is still its FMV. Tax form 1040 year 2008 See Employee Discounts in Publication 15-B. Tax form 1040 year 2008 Restricted Property If you receive property for your services and the property is subject to certain restrictions, your basis in the property is its FMV when it becomes substantially vested unless you make the election discussed later. Tax form 1040 year 2008 Property becomes substantially vested when your rights in the property or the rights of any person to whom you transfer the property are not subject to a substantial risk of forfeiture. Tax form 1040 year 2008 There is substantial risk of forfeiture when the rights to full enjoyment of the property depend on the future performance of substantial services by any person. Tax form 1040 year 2008 When the property becomes substantially vested, include the FMV, less any amount you paid for the property, in income. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 Your employer gives you stock for services performed under the condition that you will have to return the stock unless you complete 5 years of service. Tax form 1040 year 2008 The stock is under a substantial risk of forfeiture and is not substantially vested when you receive it. Tax form 1040 year 2008 You do not report any income until you have completed the 5 years of service that satisfy the condition. Tax form 1040 year 2008 Fair market value. Tax form 1040 year 2008   Figure the FMV of property you received without considering any restriction except one that by its terms will never end. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 You received stock from your employer for services you performed. Tax form 1040 year 2008 If you want to sell the stock while you are still employed, you must sell the stock to your employer at book value. Tax form 1040 year 2008 At your retirement or death, you or your estate must offer to sell the stock to your employer at its book value. Tax form 1040 year 2008 This is a restriction that by its terms will never end and you must consider it when you figure the FMV. Tax form 1040 year 2008 Election. Tax form 1040 year 2008   You can choose to include in your gross income the FMV of the property at the time of transfer, less any amount you paid for it. Tax form 1040 year 2008 If you make this choice, the substantially vested rules do not apply. Tax form 1040 year 2008 Your basis is the amount you paid plus the amount you included in income. Tax form 1040 year 2008   See the discussion of Restricted Property in Publication 525 for more information. Tax form 1040 year 2008 Taxable Exchanges A taxable exchange is one in which the gain is taxable or the loss is deductible. Tax form 1040 year 2008 A taxable gain or deductible loss is also known as a recognized gain or loss. Tax form 1040 year 2008 If you receive property in exchange for other property in a taxable exchange, the basis of property you receive is usually its FMV at the time of the exchange. Tax form 1040 year 2008 A taxable exchange occurs when you receive cash or property not similar or related in use to the property exchanged. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 You trade a tract of farm land with an adjusted basis of $3,000 for a tractor that has an FMV of $6,000. Tax form 1040 year 2008 You must report a taxable gain of $3,000 for the land. Tax form 1040 year 2008 The tractor has a basis of $6,000. Tax form 1040 year 2008 Involuntary Conversions If you receive property as a result of an involuntary conversion, such as a casualty, theft, or condemnation, you can figure the basis of the replacement property you receive using the basis of the converted property. Tax form 1040 year 2008 Similar or related property. Tax form 1040 year 2008   If you receive replacement property similar or related in service or use to the converted property, the replacement property's basis is the old property's basis on the date of the conversion. Tax form 1040 year 2008 However, make the following adjustments. Tax form 1040 year 2008 Decrease the basis by the following. Tax form 1040 year 2008 Any loss you recognize on the conversion, and Any money you receive that you do not spend on similar property. Tax form 1040 year 2008 Increase the basis by the following. Tax form 1040 year 2008 Any gain you recognize on the conversion, and Any cost of acquiring the replacement property. Tax form 1040 year 2008 Money or property not similar or related. Tax form 1040 year 2008   If you receive money or property not similar or related in service or use to the converted property, and you buy replacement property similar or related in service or use to the converted property, the basis of the new property is its cost decreased by the gain not recognized on the conversion. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 The state condemned your property. Tax form 1040 year 2008 The property had an adjusted basis of $26,000 and the state paid you $31,000 for it. Tax form 1040 year 2008 You realized a gain of $5,000 ($31,000 − $26,000). Tax form 1040 year 2008 You bought replacement property similar in use to the converted property for $29,000. Tax form 1040 year 2008 You recognize a gain of $2,000 ($31,000 − $29,000), the unspent part of the payment from the state. Tax form 1040 year 2008 Your gain not recognized is $3,000, the difference between the $5,000 realized gain and the $2,000 recognized gain. Tax form 1040 year 2008 The basis of the new property is figured as follows: Cost of replacement property $29,000 Minus: Gain not recognized 3,000 Basis of the replacement property $26,000 Allocating the basis. Tax form 1040 year 2008   If you buy more than one piece of replacement property, allocate your basis among the properties based on their respective costs. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 The state in the previous example condemned your unimproved real property and the replacement property you bought was improved real property with both land and buildings. Tax form 1040 year 2008 Allocate the replacement property's $26,000 basis between land and buildings based on their respective costs. Tax form 1040 year 2008 More information. Tax form 1040 year 2008   For more information about condemnations, see Involuntary Conversions in Publication 544. Tax form 1040 year 2008 For more information about casualty and theft losses, see Publication 547. Tax form 1040 year 2008 Nontaxable Exchanges A nontaxable exchange is an exchange in which you are not taxed on any gain and you cannot deduct any loss. Tax form 1040 year 2008 If you receive property in a nontaxable exchange, its basis is usually the same as the basis of the property you transferred. Tax form 1040 year 2008 A nontaxable gain or loss is also known as an unrecognized gain or loss. Tax form 1040 year 2008 Like-Kind Exchanges The exchange of property for the same kind of property is the most common type of nontaxable exchange. Tax form 1040 year 2008 To qualify as a like-kind exchange, you must hold for business or investment purposes both the property you transfer and the property you receive. Tax form 1040 year 2008 There must also be an exchange of like-kind property. Tax form 1040 year 2008 For more information, see Like-Kind Exchanges in Publication 544. Tax form 1040 year 2008 The basis of the property you receive is the same as the basis of the property you gave up. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 You exchange real estate (adjusted basis $50,000, FMV $80,000) held for investment for other real estate (FMV $80,000) held for investment. Tax form 1040 year 2008 Your basis in the new property is the same as the basis of the old ($50,000). Tax form 1040 year 2008 Exchange expenses. Tax form 1040 year 2008   Exchange expenses are generally the closing costs you pay. Tax form 1040 year 2008 They include such items as brokerage commissions, attorney fees, deed preparation fees, etc. Tax form 1040 year 2008 Add them to the basis of the like-kind property received. Tax form 1040 year 2008 Property plus cash. Tax form 1040 year 2008   If you trade property in a like-kind exchange and also pay money, the basis of the property received is the basis of the property you gave up increased by the money you paid. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 You trade in a truck (adjusted basis $3,000) for another truck (FMV $7,500) and pay $4,000. Tax form 1040 year 2008 Your basis in the new truck is $7,000 (the $3,000 basis of the old truck plus the $4,000 paid). Tax form 1040 year 2008 Special rules for related persons. Tax form 1040 year 2008   If a like-kind exchange takes place directly or indirectly between related persons and either party disposes of the property within 2 years after the exchange, the exchange no longer qualifies for like-kind exchange treatment. Tax form 1040 year 2008 Each person must report any gain or loss not recognized on the original exchange. Tax form 1040 year 2008 Each person reports it on the tax return filed for the year in which the later disposition occurs. Tax form 1040 year 2008 If this rule applies, the basis of the property received in the original exchange will be its fair market value. Tax form 1040 year 2008   These rules generally do not apply to the following kinds of property dispositions. Tax form 1040 year 2008 Dispositions due to the death of either related person, Involuntary conversions, and Dispositions in which neither the original exchange nor the subsequent disposition had as a main purpose the avoidance of federal income tax. Tax form 1040 year 2008 Related persons. Tax form 1040 year 2008   Generally, related persons are ancestors, lineal descendants, brothers and sisters (whole or half), and a spouse. Tax form 1040 year 2008   For other related persons (for example, two corporations, an individual and a corporation, a grantor and fiduciary, etc. Tax form 1040 year 2008 ), see Nondeductible Loss in chapter 2 of Publication 544. Tax form 1040 year 2008 Exchange of business property. Tax form 1040 year 2008   Exchanging the assets of one business for the assets of another business is a multiple property exchange. Tax form 1040 year 2008 For information on figuring basis, see Multiple Property Exchanges in chapter 1 of Publication 544. Tax form 1040 year 2008 Partially Nontaxable Exchange A partially nontaxable exchange is an exchange in which you receive unlike property or money in addition to like property. Tax form 1040 year 2008 The basis of the property you receive is the same as the basis of the property you gave up, with the following adjustments. Tax form 1040 year 2008 Decrease the basis by the following amounts. Tax form 1040 year 2008 Any money you receive, and Any loss you recognize on the exchange. Tax form 1040 year 2008 Increase the basis by the following amounts. Tax form 1040 year 2008 Any additional costs you incur, and Any gain you recognize on the exchange. Tax form 1040 year 2008 If the other party to the exchange assumes your liabilities, treat the debt assumption as money you received in the exchange. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 You traded a truck (adjusted basis $6,000) for a new truck (FMV $5,200) and $1,000 cash. Tax form 1040 year 2008 You realized a gain of $200 ($6,200 − $6,000). Tax form 1040 year 2008 This is the FMV of the truck received plus the cash minus the adjusted basis of the truck you traded ($5,200 + $1,000 – $6,000). Tax form 1040 year 2008 You include all the gain in income (recognized gain) because the gain is less than the cash received. Tax form 1040 year 2008 Your basis in the new truck is: Adjusted basis of old truck $6,000 Minus: Cash received (adjustment 1(a)) 1,000   $5,000 Plus: Gain recognized (adjustment 2(b)) 200 Basis of new truck $5,200 Allocation of basis. Tax form 1040 year 2008   Allocate the basis first to the unlike property, other than money, up to its FMV on the date of the exchange. Tax form 1040 year 2008 The rest is the basis of the like property. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 You had an adjusted basis of $15,000 in real estate you held for investment. Tax form 1040 year 2008 You exchanged it for other real estate to be held for investment with an FMV of $12,500, a truck with an FMV of $3,000, and $1,000 cash. Tax form 1040 year 2008 The truck is unlike property. Tax form 1040 year 2008 You realized a gain of $1,500 ($16,500 − $15,000). Tax form 1040 year 2008 This is the FMV of the real estate received plus the FMV of the truck received plus the cash minus the adjusted basis of the real estate you traded ($12,500 + $3,000 + $1,000 – $15,000). Tax form 1040 year 2008 You include in income (recognize) all $1,500 of the gain because it is less than the FMV of the unlike property plus the cash received. Tax form 1040 year 2008 Your basis in the properties you received is figured as follows. Tax form 1040 year 2008 Adjusted basis of real estate transferred $15,000 Minus: Cash received (adjustment 1(a)) 1,000   $14,000 Plus: Gain recognized (adjustment 2(b)) 1,500 Total basis of properties received $15,500 Allocate the total basis of $15,500 first to the unlike property — the truck ($3,000). Tax form 1040 year 2008 This is the truck's FMV. Tax form 1040 year 2008 The rest ($12,500) is the basis of the real estate. Tax form 1040 year 2008 Sale and Purchase If you sell property and buy similar property in two mutually dependent transactions, you may have to treat the sale and purchase as a single nontaxable exchange. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 You are a salesperson and you use one of your cars 100% for business. Tax form 1040 year 2008 You have used this car in your sales activities for 2 years and have depreciated it. Tax form 1040 year 2008 Your adjusted basis in the car is $22,600 and its FMV is $23,100. Tax form 1040 year 2008 You are interested in a new car, which sells for $28,000. Tax form 1040 year 2008 If you trade your old car and pay $4,900 for the new one, your basis for depreciation for the new car would be $27,500 ($4,900 plus the $22,600 basis of your old car). Tax form 1040 year 2008 However, you want a higher basis for depreciating the new car, so you agree to pay the dealer $28,000 for the new car if he will pay you $23,100 for your old car. Tax form 1040 year 2008 Because the two transactions are dependent on each other, you are treated as having exchanged your old car for the new one and paid $4,900 ($28,000 − $23,100). Tax form 1040 year 2008 Your basis for depreciating the new car is $27,500, the same as if you traded the old car. Tax form 1040 year 2008 Partial Business Use of Property If you have property used partly for business and partly for personal use, and you exchange it in a nontaxable exchange for property to be used wholly or partly in your business, the basis of the property you receive is figured as if you had exchanged two properties. Tax form 1040 year 2008 The first is an exchange of like-kind property. Tax form 1040 year 2008 The second is personal-use property on which gain is recognized and loss is not recognized. Tax form 1040 year 2008 First, figure your adjusted basis in the property as if you transferred two separate properties. Tax form 1040 year 2008 Figure the adjusted basis of each part of the property by taking into account any adjustments to basis. Tax form 1040 year 2008 Deduct the depreciation you took or could have taken from the adjusted basis of the business part. Tax form 1040 year 2008 Then figure the amount realized for your property and allocate it to the business and nonbusiness parts of the property. Tax form 1040 year 2008 The business part of the property is permitted to be exchanged tax free. Tax form 1040 year 2008 However, you must recognize any gain from the exchange of the nonbusiness part. Tax form 1040 year 2008 You are deemed to have received, in exchange for the nonbusiness part, an amount equal to its FMV on the date of the exchange. Tax form 1040 year 2008 The basis of the property you acquired is the total basis of the property transferred (adjusted to the date of the exchange), increased by any gain recognized on the nonbusiness part. Tax form 1040 year 2008 If the nonbusiness part of the property transferred is your main home, you may qualify to exclude from income all or part of the gain on that part. Tax form 1040 year 2008 For more information, see Publication 523. Tax form 1040 year 2008 Trade of car used partly in business. Tax form 1040 year 2008   If you trade in a car you used partly in your business for another car you will use in your business, your basis for depreciation of the new car is not the same as your basis for figuring a gain or loss on its sale. Tax form 1040 year 2008   For information on figuring your basis for depreciation, see Publication 463. Tax form 1040 year 2008 Property Transferred From a Spouse The basis of property transferred to you or transferred in trust for your benefit by your spouse (or former spouse if the transfer is incident to divorce), is the same as your spouse's adjusted basis. Tax form 1040 year 2008 However, adjust your basis for any gain recognized by your spouse or former spouse on property transferred in trust. Tax form 1040 year 2008 This rule applies only to a transfer of property in trust in which the liabilities assumed, plus the liabilities to which the property is subject, are more than the adjusted basis of the property transferred. Tax form 1040 year 2008 If the property transferred to you is a series E, series EE, or series I United States savings bond, the transferor must include in income the interest accrued to the date of transfer. Tax form 1040 year 2008 Your basis in the bond immediately after the transfer is equal to the transferor's basis increased by the interest income includible in the transferor's income. Tax form 1040 year 2008 For more information on these bonds, see Publication 550. Tax form 1040 year 2008 At the time of the transfer, the transferor must give you the records necessary to determine the adjusted basis and holding period of the property as of the date of transfer. Tax form 1040 year 2008 For more information, see Publication 504, Divorced or Separated Individuals. Tax form 1040 year 2008 Property Received as a Gift To figure the basis of property you receive as a gift, you must know its adjusted basis (defined earlier) to the donor just before it was given to you, its FMV at the time it was given to you, and any gift tax paid on it. Tax form 1040 year 2008 FMV Less Than Donor's Adjusted Basis If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. Tax form 1040 year 2008 Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustment to basis while you held the property. Tax form 1040 year 2008 Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustment to basis while you held the property (see Adjusted Basis earlier). Tax form 1040 year 2008 If you use the donor's adjusted basis for figuring a gain and get a loss, and then use the FMV for figuring a loss and have a gain, you have neither gain nor loss on the sale or disposition of the property. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 You received an acre of land as a gift. Tax form 1040 year 2008 At the time of the gift, the land had an FMV of $8,000. Tax form 1040 year 2008 The donor's adjusted basis was $10,000. Tax form 1040 year 2008 After you received the land, no events occurred to increase or decrease your basis. Tax form 1040 year 2008 If you sell the land for $12,000, you will have a $2,000 gain because you must use the donor's adjusted basis ($10,000) at the time of the gift as your basis to figure gain. Tax form 1040 year 2008 If you sell the land for $7,000, you will have a $1,000 loss because you must use the FMV ($8,000) at the time of the gift as your basis to figure a loss. Tax form 1040 year 2008 If the sales price is between $8,000 and $10,000, you have neither gain nor loss. Tax form 1040 year 2008 For instance, if the sales price was $9,000 and you tried to figure a gain using the donor's adjusted basis ($10,000), you would get a $1,000 loss. Tax form 1040 year 2008 If you then tried to figure a loss using the FMV ($8,000), you would get a $1,000 gain. Tax form 1040 year 2008 Business property. Tax form 1040 year 2008   If you hold the gift as business property, your basis for figuring any depreciation, depletion, or amortization deduction is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you hold the property. Tax form 1040 year 2008 FMV Equal to or More Than Donor's Adjusted Basis If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis at the time you received the gift. Tax form 1040 year 2008 Increase your basis by all or part of any gift tax paid, depending on the date of the gift. Tax form 1040 year 2008 Also, for figuring gain or loss from a sale or other disposition of the property, or for figuring depreciation, depletion, or amortization deductions on business property, you must increase or decrease your basis by any required adjustments to basis while you held the property. Tax form 1040 year 2008 See Adjusted Basis earlier. Tax form 1040 year 2008 Gift received before 1977. Tax form 1040 year 2008   If you received a gift before 1977, increase your basis in the gift (the donor's adjusted basis) by any gift tax paid on it. Tax form 1040 year 2008 However, do not increase your basis above the FMV of the gift at the time it was given to you. Tax form 1040 year 2008 Example 1. Tax form 1040 year 2008 You were given a house in 1976 with an FMV of $21,000. Tax form 1040 year 2008 The donor's adjusted basis was $20,000. Tax form 1040 year 2008 The donor paid a gift tax of $500. Tax form 1040 year 2008 Your basis is $20,500, the donor's adjusted basis plus the gift tax paid. Tax form 1040 year 2008 Example 2. Tax form 1040 year 2008 If, in Example 1, the gift tax paid had been $1,500, your basis would be $21,000. Tax form 1040 year 2008 This is the donor's adjusted basis plus the gift tax paid, limited to the FMV of the house at the time you received the gift. Tax form 1040 year 2008 Gift received after 1976. Tax form 1040 year 2008   If you received a gift after 1976, increase your basis in the gift (the donor's adjusted basis) by the part of the gift tax paid on it that is due to the net increase in value of the gift. Tax form 1040 year 2008 Figure the increase by multiplying the gift tax paid by a fraction. Tax form 1040 year 2008 The numerator of the fraction is the net increase in value of the gift and the denominator is the amount of the gift. Tax form 1040 year 2008   The net increase in value of the gift is the FMV of the gift less the donor's adjusted basis. Tax form 1040 year 2008 The amount of the gift is its value for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. Tax form 1040 year 2008 For information on the gift tax, see Publication 950, Introduction to Estate and Gift Taxes. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 In 2010, you received a gift of property from your mother that had an FMV of $50,000. Tax form 1040 year 2008 Her adjusted basis was $20,000. Tax form 1040 year 2008 The amount of the gift for gift tax purposes was $37,000 ($50,000 minus the $13,000 annual exclusion). Tax form 1040 year 2008 She paid a gift tax of $9,000. Tax form 1040 year 2008 Your basis, $27,290, is figured as follows: Fair market value $50,000 Minus: Adjusted basis 20,000 Net increase in value $30,000 Gift tax paid $9,000 Multiplied by ($30,000 ÷ $37,000) . Tax form 1040 year 2008 81 Gift tax due to net increase in value $7,290 Adjusted basis of property to your mother 20,000 Your basis in the property $27,290 Inherited Property Special rules apply to property acquired from a decedent who died in 2010. Tax form 1040 year 2008 See Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, for details. Tax form 1040 year 2008 If you inherited property from a decedent who died before 2010, your basis in property you inherit from a decedent is generally one of the following. Tax form 1040 year 2008 The FMV of the property at the date of the individual's death. Tax form 1040 year 2008 The FMV on the alternate valuation date if the personal representative for the estate chooses to use alternate valuation. Tax form 1040 year 2008 For information on the alternate valuation date, see the Instructions for Form 706. Tax form 1040 year 2008 The value under the special-use valuation method for real property used in farming or a closely held business if chosen for estate tax purposes. Tax form 1040 year 2008 This method is discussed later. Tax form 1040 year 2008 The decedent's adjusted basis in land to the extent of the value excluded from the decedent's taxable estate as a qualified conservation easement. Tax form 1040 year 2008 For information on a qualified conservation easement, see the Instructions for Form 706. Tax form 1040 year 2008 If a federal estate tax return does not have to be filed, your basis in the inherited property is its appraised value at the date of death for state inheritance or transmission taxes. Tax form 1040 year 2008 For more information, see the Instructions for Form 706. Tax form 1040 year 2008 Appreciated property. Tax form 1040 year 2008   The above rule does not apply to appreciated property you receive from a decedent if you or your spouse originally gave the property to the decedent within 1 year before the decedent's death. Tax form 1040 year 2008 Your basis in this property is the same as the decedent's adjusted basis in the property immediately before his or her death, rather than its FMV. Tax form 1040 year 2008 Appreciated property is any property whose FMV on the day it was given to the decedent is more than its adjusted basis. Tax form 1040 year 2008 Community Property In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), husband and wife are each usually considered to own half the community property. Tax form 1040 year 2008 When either spouse dies, the total value of the community property, even the part belonging to the surviving spouse, generally becomes the basis of the entire property. Tax form 1040 year 2008 For this rule to apply, at least half the value of the community property interest must be includable in the decedent's gross estate, whether or not the estate must file a return. Tax form 1040 year 2008 For example, you and your spouse owned community property that had a basis of $80,000. Tax form 1040 year 2008 When your spouse died, half the FMV of the community interest was includible in your spouse's estate. Tax form 1040 year 2008 The FMV of the community interest was $100,000. Tax form 1040 year 2008 The basis of your half of the property after the death of your spouse is $50,000 (half of the $100,000 FMV). Tax form 1040 year 2008 The basis of the other half to your spouse's heirs is also $50,000. Tax form 1040 year 2008 For more information on community property, see Publication 555, Community Property. Tax form 1040 year 2008 Property Held by Surviving Tenant The following example explains the rule for the basis of property held by a surviving tenant in joint tenancy or tenancy by the entirety. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 John and Jim owned, as joint tenants with right of survivorship, business property they purchased for $30,000. Tax form 1040 year 2008 John furnished two-thirds of the purchase price and Jim furnished one-third. Tax form 1040 year 2008 Depreciation deductions allowed before John's death were $12,000. Tax form 1040 year 2008 Under local law, each had a half interest in the income from the property. Tax form 1040 year 2008 At the date of John's death, the property had an FMV of $60,000, two-thirds of which is includable in John's estate. Tax form 1040 year 2008 Jim figures his basis in the property at the date of John's death as follows: Interest Jim bought with his own funds—1/3 of $30,000 cost $10,000   Interest Jim received on John's death—2/3 of $60,000 FMV 40,000 $50,000 Minus: ½ of $12,000 depreciation before John's death 6,000 Jim's basis at the date of John's death $44,000 If Jim had not contributed any part of the purchase price, his basis at the date of John's death would be $54,000. Tax form 1040 year 2008 This is figured by subtracting from the $60,000 FMV, the $6,000 depreciation allocated to Jim's half interest before the date of death. Tax form 1040 year 2008 If under local law Jim had no interest in the income from the property and he contributed no part of the purchase price, his basis at John's death would be $60,000, the FMV of the property. Tax form 1040 year 2008 Qualified Joint Interest Include one-half of the value of a qualified joint interest in the decedent's gross estate. Tax form 1040 year 2008 It does not matter how much each spouse contributed to the purchase price. Tax form 1040 year 2008 Also, it does not matter which spouse dies first. Tax form 1040 year 2008 A qualified joint interest is any interest in property held by husband and wife as either of the following. Tax form 1040 year 2008 Tenants by the entirety, or Joint tenants with right of survivorship if husband and wife are the only joint tenants. Tax form 1040 year 2008 Basis. Tax form 1040 year 2008   As the surviving spouse, your basis in property you owned with your spouse as a qualified joint interest is the cost of your half of the property with certain adjustments. Tax form 1040 year 2008 Decrease the cost by any deductions allowed to you for depreciation and depletion. Tax form 1040 year 2008 Increase the reduced cost by your basis in the half you inherited. Tax form 1040 year 2008 Farm or Closely Held Business Under certain conditions, when a person dies the executor or personal representative of that person's estate can choose to value the qualified real property on other than its FMV. Tax form 1040 year 2008 If so, the executor or personal representative values the qualified real property based on its use as a farm or its use in a closely held business. Tax form 1040 year 2008 If the executor or personal representative chooses this method of valuation for estate tax purposes, that value is the basis of the property for the heirs. Tax form 1040 year 2008 Qualified heirs should be able to get the necessary value from the executor or personal representative of the estate. Tax form 1040 year 2008 Special-use valuation. Tax form 1040 year 2008   If you are a qualified heir who received special-use valuation property, your basis in the property is the estate's or trust's basis in that property immediately before the distribution. Tax form 1040 year 2008 Increase your basis by any gain recognized by the estate or trust because of post-death appreciation. Tax form 1040 year 2008 Post-death appreciation is the property's FMV on the date of distribution minus the property's FMV either on the date of the individual's death or the alternate valuation date. Tax form 1040 year 2008 Figure all FMVs without regard to the special-use valuation. Tax form 1040 year 2008   You can elect to increase your basis in special-use valuation property if it becomes subject to the additional estate tax. Tax form 1040 year 2008 This tax is assessed if, within 10 years after the death of the decedent, you transfer the property to a person who is not a member of your family or the property stops being used as a farm or in a closely held business. Tax form 1040 year 2008   To increase your basis in the property, you must make an irrevocable election and pay interest on the additional estate tax figured from the date 9 months after the decedent's death until the date of the payment of the additional estate tax. Tax form 1040 year 2008 If you meet these requirements, increase your basis in the property to its FMV on the date of the decedent's death or the alternate valuation date. Tax form 1040 year 2008 The increase in your basis is considered to have occurred immediately before the event that results in the additional estate tax. Tax form 1040 year 2008   You make the election by filing with Form 706-A a statement that does all of the following. Tax form 1040 year 2008 Contains your name, address, and taxpayer identification number and those of the estate; Identifies the election as an election under section 1016(c) of the Internal Revenue Code; Specifies the property for which the election is made; and Provides any additional information required by the Instructions for Form 706-A. Tax form 1040 year 2008   For more information, see the Instructions for Form 706 and the Instructions for Form 706-A. Tax form 1040 year 2008 Property Changed to Business or Rental Use If you hold property for personal use and then change it to business use or use it to produce rent, you must figure its basis for depreciation. Tax form 1040 year 2008 An example of changing property held for personal use to business use would be renting out your former main home. Tax form 1040 year 2008 Basis for depreciation. Tax form 1040 year 2008   The basis for depreciation is the lesser of the following amounts. Tax form 1040 year 2008 The FMV of the property on the date of the change, or Your adjusted basis on the date of the change. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 Several years ago you paid $160,000 to have your home built on a lot that cost $25,000. Tax form 1040 year 2008 You paid $20,000 for permanent improvements to the house and claimed a $2,000 casualty loss deduction for damage to the house before changing the property to rental use last year. Tax form 1040 year 2008 Because land is not depreciable, you include only the cost of the house when figuring the basis for depreciation. Tax form 1040 year 2008 Your adjusted basis in the house when you changed its use was $178,000 ($160,000 + $20,000 − $2,000). Tax form 1040 year 2008 On the same date, your property had an FMV of $180,000, of which $15,000 was for the land and $165,000 was for the house. Tax form 1040 year 2008 The basis for figuring depreciation on the house is its FMV on the date of change ($165,000) because it is less than your adjusted basis ($178,000). Tax form 1040 year 2008 Sale of property. Tax form 1040 year 2008   If you later sell or dispose of property changed to business or rental use, the basis of the property you use will depend on whether you are figuring gain or loss. Tax form 1040 year 2008 Gain. Tax form 1040 year 2008   The basis for figuring a gain is your adjusted basis when you sell the property. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 Assume the same facts as in the previous example except that you sell the property at a gain after being allowed depreciation deductions of $37,500. Tax form 1040 year 2008 Your adjusted basis for figuring gain is $165,500 ($178,000 + $25,000 (land) − $37,500). Tax form 1040 year 2008 Loss. Tax form 1040 year 2008   Figure the basis for a loss starting with the smaller of your adjusted basis or the FMV of the property at the time of the change to business or rental use. Tax form 1040 year 2008 Then adjust this amount for the period after the change in the property's use, as discussed earlier under Adjusted Basis, to arrive at a basis for loss. Tax form 1040 year 2008 Example. Tax form 1040 year 2008 Assume the same facts as in the previous example, except that you sell the property at a loss after being allowed depreciation deductions of $37,500. Tax form 1040 year 2008 In this case, you would start with the FMV on the date of the change to rental use ($180,000) because it is less than the adjusted basis of $203,000 ($178,000 + $25,000) on that date. Tax form 1040 year 2008 Reduce that amount ($180,000) by the depreciation deductions to arrive at a basis for loss of $142,500 ($180,000 − $37,500). Tax form 1040 year 2008 How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. Tax form 1040 year 2008 By selecting the method that is best for you, you will have quick and easy access to tax help. Tax form 1040 year 2008 Contacting your Taxpayer Advocate. Tax form 1040 year 2008   The Taxpayer Advocate Service (TAS) is an independent organization within the IRS. Tax form 1040 year 2008 We help taxpayers who are experiencing economic harm, such as not being able to provide necessities like housing, transportation, or food; taxpayers who are seeking help in resolving tax problems with the IRS; and those who believe that an IRS system or procedure is not working as it should. Tax form 1040 year 2008 Here are seven things every taxpayer should know about TAS. Tax form 1040 year 2008 TAS is your voice at the IRS. Tax form 1040 year 2008 Our service is free, confidential, and tailored to meet your needs. Tax form 1040 year 2008 You may be eligible for our help if you have tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn't working as it should. Tax form 1040 year 2008 We help taxpayers whose problems are causing financial difficulty or significant cost, including the cost of professional representation. Tax form 1040 year 2008 This includes businesses as well as individuals. Tax form 1040 year 2008 Our employees know the IRS and how to navigate it. Tax form 1040 year 2008 If you qualify for our help, we'll assign your case to an advocate who will listen to your problem, help you understand what needs to be done to resolve it, and stay with you every step of the way until your problem is resolved. Tax form 1040 year 2008 We have at least one local taxpayer advocate in every state, the District of Columbia, and Puerto Rico. Tax form 1040 year 2008 You can call your local advocate, whose number is in your phone book, in Publication 1546, Taxpayer Advocate Service—Your Voice at the IRS, and on our website at www. Tax form 1040 year 2008 irs. Tax form 1040 year 2008 gov/advocate. Tax form 1040 year 2008 You can also call our toll-free line at 1-877-777-4778 or TTY/TDD 1-800-829-4059. Tax form 1040 year 2008 You can learn about your rights and responsibilities as a taxpayer by visiting our online tax toolkit at www. Tax form 1040 year 2008 taxtoolkit. Tax form 1040 year 2008 irs. Tax form 1040 year 2008 gov. Tax form 1040 year 2008 You can get updates on hot tax topics by visiting our YouTube channel at www. Tax form 1040 year 2008 youtube. Tax form 1040 year 2008 com/tasnta and our Facebook page at www. Tax form 1040 year 2008 facebook. Tax form 1040 year 2008 com/YourVoiceAtIRS, or by following our tweets at www. Tax form 1040 year 2008 twitter. Tax form 1040 year 2008 com/YourVoiceAtIRS. Tax form 1040 year 2008 Low Income Taxpayer Clinics (LITCs). Tax form 1040 year 2008   The Low Income Taxpayer Clinic program serves individuals who have a problem with the IRS and whose income is below a certain level. Tax form 1040 year 2008 LITCs are independent from the IRS. Tax form 1040 year 2008 Most LITCs can provide representation before the IRS or in court on audits, tax collection disputes, and other issues for free or a small fee. Tax form 1040 year 2008 If an individual's native language is not English, some clinics can provide multilingual information about taxpayer rights and responsibilities. Tax form 1040 year 2008 For more information, see Publication 4134, Low Income Taxpayer Clinic List. Tax form 1040 year 2008 This publication is available at IRS. Tax form 1040 year 2008 gov, by calling 1-800-TAX-FORM (1-800-829-3676), or at your local IRS office. Tax form 1040 year 2008 Free tax services. Tax form 1040 year 2008   Publication 910, IRS Guide to Free Tax Services, is your guide to IRS services and resources. Tax form 1040 year 2008 Learn about free tax information from the IRS, including publications, services, and education and assistance programs. Tax form 1040 year 2008 The publication also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on the telephone. Tax form 1040 year 2008 The majority of the information and services listed in this publication are available to you free of charge. Tax form 1040 year 2008 If there is a fee associated with a resource or service, it is listed in the publication. Tax form 1040 year 2008   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with d