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Tax Forms 1040ez

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Tax Forms 1040ez

Tax forms 1040ez 4. Tax forms 1040ez   Sales and Trades of Investment Property Table of Contents IntroductionNominees. Tax forms 1040ez Topics - This chapter discusses: Useful Items - You may want to see: What Is a Sale or Trade?Dividend versus sale or trade. Tax forms 1040ez Worthless Securities Constructive Sales of Appreciated Financial Positions Section 1256 Contracts Marked to Market Basis of Investment PropertyCost Basis Basis Other Than Cost Adjusted Basis Stocks and Bonds How To Figure Gain or LossFair market value. Tax forms 1040ez Debt paid off. Tax forms 1040ez Payment of cash. Tax forms 1040ez Special Rules for Mutual Funds Nontaxable TradesLike-Kind Exchanges Corporate Stocks Exchange of Shares In One Mutual Fund For Shares In Another Mutual Fund Insurance Policies and Annuities U. Tax forms 1040ez S. Tax forms 1040ez Treasury Notes or Bonds Transfers Between Spouses Related Party TransactionsGain on Sale or Trade of Depreciable Property Capital Gains and LossesCapital or Ordinary Gain or Loss Holding Period Nonbusiness Bad Debts Short Sales Wash Sales Options Straddles Sales of Stock to ESOPs or Certain Cooperatives Rollover of Gain From Publicly Traded Securities Gains on Qualified Small Business Stock Exclusion of Gain From DC Zone Assets Reporting Capital Gains and LossesException 1. Tax forms 1040ez Exception 2. Tax forms 1040ez Section 1256 contracts and straddles. Tax forms 1040ez Market discount bonds. Tax forms 1040ez File Form 1099-B or Form 1099-S with the IRS. Tax forms 1040ez Capital Losses Capital Gain Tax Rates Special Rules for Traders in SecuritiesHow To Report Introduction This chapter explains the tax treatment of sales and trades of investment property. Tax forms 1040ez Investment property. Tax forms 1040ez   This is property that produces investment income. Tax forms 1040ez Examples include stocks, bonds, and Treasury bills and notes. Tax forms 1040ez Property used in a trade or business is not investment property. Tax forms 1040ez Form 1099-B. Tax forms 1040ez   If you sold property such as stocks, bonds, mutual funds, or certain commodities through a broker during the year, you should receive, for each sale, a Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, or substitute statement, from the broker. Tax forms 1040ez You should receive the statement by February 15 of the next year. Tax forms 1040ez It will show the gross proceeds from the sale. Tax forms 1040ez The IRS will also get a copy of Form 1099-B from the broker. Tax forms 1040ez   Use Form 1099-B (or substitute statement received from your broker) to complete Form 8949. Tax forms 1040ez If you sold a covered security in 2013, your broker will send you a Form 1099-B (or substitute statement) that shows your basis. Tax forms 1040ez This will help you complete Form 8949. Tax forms 1040ez Generally, a covered security is a security you acquired after 2010, with certain exceptions explained in the Instructions for Form 8949. Tax forms 1040ez    For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in this chapter. Tax forms 1040ez Also see the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040). Tax forms 1040ez Nominees. Tax forms 1040ez   If someone receives gross proceeds as a nominee for you, that person will give you a Form 1099-B, which will show gross proceeds received on your behalf. Tax forms 1040ez   If you receive a Form 1099-B that includes gross proceeds belonging to another person, see Nominees , later under Reporting Capital Gains and Losses for more information. Tax forms 1040ez Other property transactions. Tax forms 1040ez   Certain transfers of property are discussed in other IRS publications. Tax forms 1040ez These include: Sale of your main home, discussed in Publication 523, Selling Your Home; Installment sales, covered in Publication 537; Various types of transactions involving business property, discussed in Publication 544, Sales and Other Dispositions of Assets; Transfers of property at death, covered in Publication 559; and Disposition of an interest in a passive activity, discussed in Publication 925. Tax forms 1040ez Topics - This chapter discusses: What Is a Sale or Trade? , Basis of Investment Property , Adjusted Basis , How To Figure Gain or Loss , Nontaxable trades , Transfers Between Spouses , Related Party Transactions , Capital Gains and Losses , Reporting Capital Gains and Losses , and Special Rules for Traders in Securities . Tax forms 1040ez Useful Items - You may want to see: Publication 551 Basis of Assets Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 6781 Gains and Losses From Section 1256 Contracts and Straddles 8582 Passive Activity Loss Limitations 8824 Like-Kind Exchanges 8949 Sales and Other Dispositions of Capital Assets See chapter 5, How To Get Tax Help , for information about getting these publications and forms. Tax forms 1040ez What Is a Sale or Trade? This section explains what is a sale or trade. Tax forms 1040ez It also explains certain transactions and events that are treated as sales or trades. Tax forms 1040ez A sale is generally a transfer of property for money or a mortgage, note, or other promise to pay money. Tax forms 1040ez A trade is a transfer of property for other property or services, and may be taxed in the same way as a sale. Tax forms 1040ez Sale and purchase. Tax forms 1040ez   Ordinarily, a transaction is not a trade when you voluntarily sell property for cash and immediately buy similar property to replace it. Tax forms 1040ez The sale and purchase are two separate transactions. Tax forms 1040ez But see Like-Kind Exchanges under Nontaxable Trades, later. Tax forms 1040ez Redemption of stock. Tax forms 1040ez   A redemption of stock is treated as a sale or trade and is subject to the capital gain or loss provisions unless the redemption is a dividend or other distribution on stock. Tax forms 1040ez Dividend versus sale or trade. Tax forms 1040ez   Whether a redemption is treated as a sale, trade, dividend, or other distribution depends on the circumstances in each case. Tax forms 1040ez Both direct and indirect ownership of stock will be considered. Tax forms 1040ez The redemption is treated as a sale or trade of stock if: The redemption is not essentially equivalent to a dividend — see Dividends and Other Distributions in chapter 1, There is a substantially disproportionate redemption of stock, There is a complete redemption of all the stock of the corporation owned by the shareholder, or The redemption is a distribution in partial liquidation of a corporation. Tax forms 1040ez Redemption or retirement of bonds. Tax forms 1040ez   A redemption or retirement of bonds or notes at their maturity generally is treated as a sale or trade. Tax forms 1040ez See Stocks, stock rights, and bonds and Discounted Debt Instruments under Capital or Ordinary Gain or Loss, later. Tax forms 1040ez   In addition, a significant modification of a bond is treated as a trade of the original bond for a new bond. Tax forms 1040ez For details, see Regulations section 1. Tax forms 1040ez 1001-3. Tax forms 1040ez Surrender of stock. Tax forms 1040ez   A surrender of stock by a dominant shareholder who retains ownership of more than half of the corporation's voting shares is treated as a contribution to capital rather than as an immediate loss deductible from taxable income. Tax forms 1040ez The surrendering shareholder must reallocate his or her basis in the surrendered shares to the shares he or she retains. Tax forms 1040ez Trade of investment property for an annuity. Tax forms 1040ez   The transfer of investment property to a corporation, trust, fund, foundation, or other organization, in exchange for a fixed annuity contract that will make guaranteed annual payments to you for life, is a taxable trade. Tax forms 1040ez If the present value of the annuity is more than your basis in the property traded, you have a taxable gain in the year of the trade. Tax forms 1040ez Figure the present value of the annuity according to factors used by commercial insurance companies issuing annuities. Tax forms 1040ez Transfer by inheritance. Tax forms 1040ez   The transfer of property of a decedent to the executor or administrator of the estate, or to the heirs or beneficiaries, is not a sale or other disposition. Tax forms 1040ez No taxable gain or deductible loss results from the transfer. Tax forms 1040ez Termination of certain rights and obligations. Tax forms 1040ez   The cancellation, lapse, expiration, or other termination of a right or obligation (other than a securities futures contract) with respect to property that is a capital asset (or that would be a capital asset if you acquired it) is treated as a sale. Tax forms 1040ez Any gain or loss is treated as a capital gain or loss. Tax forms 1040ez   This rule does not apply to the retirement of a debt instrument. Tax forms 1040ez See Redemption or retirement of bonds , earlier. Tax forms 1040ez Worthless Securities Stocks, stock rights, and bonds (other than those held for sale by a securities dealer) that became completely worthless during the tax year are treated as though they were sold on the last day of the tax year. Tax forms 1040ez This affects whether your capital loss is long term or short term. Tax forms 1040ez See Holding Period , later. Tax forms 1040ez Worthless securities also include securities that you abandon after March 12, 2008. Tax forms 1040ez To abandon a security, you must permanently surrender and relinquish all rights in the security and receive no consideration in exchange for it. Tax forms 1040ez All the facts and circumstances determine whether the transaction is properly characterized as an abandonment or other type of transaction, such as an actual sale or exchange, contribution to capital, dividend, or gift. Tax forms 1040ez If you are a cash basis taxpayer and make payments on a negotiable promissory note that you issued for stock that became worthless, you can deduct these payments as losses in the years you actually make the payments. Tax forms 1040ez Do not deduct them in the year the stock became worthless. Tax forms 1040ez How to report loss. Tax forms 1040ez   Report worthless securities in Form 8949, Part I or Part II, whichever applies. Tax forms 1040ez    Report your worthless securities transactions on Form 8949 with the correct box checked for these transactions. Tax forms 1040ez See Form 8949 and the Instructions for Form 8949. Tax forms 1040ez Filing a claim for refund. Tax forms 1040ez   If you do not claim a loss for a worthless security on your original return for the year it becomes worthless, you can file a claim for a credit or refund due to the loss. Tax forms 1040ez You must use Form 1040X, Amended U. Tax forms 1040ez S. Tax forms 1040ez Individual Income Tax Return, to amend your return for the year the security became worthless. Tax forms 1040ez You must file it within 7 years from the date your original return for that year had to be filed, or 2 years from the date you paid the tax, whichever is later. Tax forms 1040ez (Claims not due to worthless securities or bad debts generally must be filed within 3 years from the date a return is filed, or 2 years from the date the tax is paid, whichever is later. Tax forms 1040ez ) For more information about filing a claim, see Publication 556. Tax forms 1040ez Constructive Sales of Appreciated Financial Positions You are treated as having made a constructive sale when you enter into certain transactions involving an appreciated financial position (defined later) in stock, a partnership interest, or certain debt instruments. Tax forms 1040ez You must recognize gain as if the position were disposed of at its fair market value on the date of the constructive sale. Tax forms 1040ez This gives you a new holding period for the position that begins on the date of the constructive sale. Tax forms 1040ez Then, when you close the transaction, you reduce your gain (or increase your loss) by the gain recognized on the constructive sale. Tax forms 1040ez Constructive sale. Tax forms 1040ez   You are treated as having made a constructive sale of an appreciated financial position if you: Enter into a short sale of the same or substantially identical property, Enter into an offsetting notional principal contract relating to the same or substantially identical property, Enter into a futures or forward contract to deliver the same or substantially identical property (including a forward contract that provides for cash settlement), or Acquire the same or substantially identical property (if the appreciated financial position is a short sale, an offsetting notional principal contract, or a futures or forward contract). Tax forms 1040ez   You are also treated as having made a constructive sale of an appreciated financial position if a person related to you enters into a transaction described above with a view toward avoiding the constructive sale treatment. Tax forms 1040ez For this purpose, a related person is any related party described under Related Party Transactions , later in this chapter. Tax forms 1040ez Exception for nonmarketable securities. Tax forms 1040ez   You are not treated as having made a constructive sale solely because you entered into a contract for sale of any stock, debt instrument, or partnership interest that is not a marketable security if it settles within 1 year of the date you enter into it. Tax forms 1040ez Exception for certain closed transactions. Tax forms 1040ez   Do not treat a transaction as a constructive sale if all of the following are true. Tax forms 1040ez You closed the transaction on or before the 30th day after the end of your tax year. Tax forms 1040ez You held the appreciated financial position throughout the 60-day period beginning on the date you closed the transaction. Tax forms 1040ez Your risk of loss was not reduced at any time during that 60-day period by holding certain other positions. Tax forms 1040ez   If a closed transaction is reestablished in a substantially similar position during the 60-day period beginning on the date the first transaction was closed, this exception still applies if the reestablished position is closed before the 30th day after the end of your tax year in which the first transaction was closed and, after that closing, (2) and (3) above are true. Tax forms 1040ez   This exception also applies to successive short sales of an entire appreciated financial position. Tax forms 1040ez For more information, see Revenue Ruling 2003-1 in Internal Revenue Bulletin 2003-3. Tax forms 1040ez This bulletin is available at www. Tax forms 1040ez irs. Tax forms 1040ez gov/pub/irs-irbs/irb03-03. Tax forms 1040ez pdf. Tax forms 1040ez Appreciated financial position. Tax forms 1040ez   This is any interest in stock, a partnership interest, or a debt instrument (including a futures or forward contract, a short sale, or an option) if disposing of the interest would result in a gain. Tax forms 1040ez Exceptions. Tax forms 1040ez   An appreciated financial position does not include the following. Tax forms 1040ez Any position from which all of the appreciation is accounted for under marked-to-market rules, including section 1256 contracts (described later under Section 1256 Contracts Marked to Market ). Tax forms 1040ez Any position in a debt instrument if: The position unconditionally entitles the holder to receive a specified principal amount, The interest payments (or other similar amounts) with respect to the position are payable at a fixed rate or a variable rate described in Regulations section 1. Tax forms 1040ez 860G-1(a)(3), and The position is not convertible, either directly or indirectly, into stock of the issuer (or any related person). Tax forms 1040ez Any hedge with respect to a position described in (2). Tax forms 1040ez Certain trust instruments treated as stock. Tax forms 1040ez   For the constructive sale rules, an interest in an actively traded trust is treated as stock unless substantially all of the value of the property held by the trust is debt that qualifies for the exception to the definition of an appreciated financial position (explained in (2) above). Tax forms 1040ez Sale of appreciated financial position. Tax forms 1040ez   A transaction treated as a constructive sale of an appreciated financial position is not treated as a constructive sale of any other appreciated financial position, as long as you continue to hold the original position. Tax forms 1040ez However, if you hold another appreciated financial position and dispose of the original position before closing the transaction that resulted in the constructive sale, you are treated as if, at the same time, you constructively sold the other appreciated financial position. Tax forms 1040ez Section 1256 Contracts Marked to Market If you hold a section 1256 contract at the end of the tax year, you generally must treat it as sold at its fair market value on the last business day of the tax year. Tax forms 1040ez Section 1256 Contract A section 1256 contract is any: Regulated futures contract, Foreign currency contract, Nonequity option, Dealer equity option, or Dealer securities futures contract. Tax forms 1040ez Exceptions. Tax forms 1040ez   A section 1256 contract does not include: Interest rate swaps, Currency swaps, Basis swaps, Interest rate caps, Interest rate floors, Commodity swaps, Equity swaps, Equity index swaps, Credit default swaps, or Similar agreements. Tax forms 1040ez For more details, including definitions of these terms, see section 1256. Tax forms 1040ez Regulated futures contract. Tax forms 1040ez   This is a contract that: Provides that amounts which must be deposited to, or can be withdrawn from, your margin account depend on daily market conditions (a system of marking to market), and Is traded on, or subject to the rules of, a qualified board of exchange. Tax forms 1040ez A qualified board of exchange is a domestic board of trade designated as a contract market by the Commodity Futures Trading Commission, any board of trade or exchange approved by the Secretary of the Treasury, or a national securities exchange registered with the Securities and Exchange Commission. Tax forms 1040ez Foreign currency contract. Tax forms 1040ez   This is a contract that: Requires delivery of a foreign currency that has positions traded through regulated futures contracts (or settlement of which depends on the value of that type of foreign currency), Is traded in the interbank market, and Is entered into at arm's length at a price determined by reference to the price in the interbank market. Tax forms 1040ez   Bank forward contracts with maturity dates longer than the maturities ordinarily available for regulated futures contracts are considered to meet the definition of a foreign currency contract if the above three conditions are satisfied. Tax forms 1040ez   Special rules apply to certain foreign currency transactions. Tax forms 1040ez These transactions may result in ordinary gain or loss treatment. Tax forms 1040ez For details, see Internal Revenue Code section 988 and Regulations sections 1. Tax forms 1040ez 988-1(a)(7) and 1. Tax forms 1040ez 988-3. Tax forms 1040ez Nonequity option. Tax forms 1040ez   This is any listed option (defined later) that is not an equity option. Tax forms 1040ez Nonequity options include debt options, commodity futures options, currency options, and broad-based stock index options. Tax forms 1040ez A broad-based stock index is based on the value of a group of diversified stocks or securities (such as the Standard and Poor's 500 index). Tax forms 1040ez Warrants based on a stock index that are economically, substantially identical in all material respects to options based on a stock index are treated as options based on a stock index. Tax forms 1040ez Cash-settled options. Tax forms 1040ez   Cash-settled options based on a stock index and either traded on or subject to the rules of a qualified board of exchange are nonequity options if the Securities and Exchange Commission (SEC) determines that the stock index is broad based. Tax forms 1040ez   This rule does not apply to options established before the SEC determines that the stock index is broad based. Tax forms 1040ez Listed option. Tax forms 1040ez   This is any option traded on, or subject to the rules of, a qualified board or exchange (as discussed earlier under Regulated futures contract). Tax forms 1040ez A listed option, however, does not include an option that is a right to acquire stock from the issuer. Tax forms 1040ez Dealer equity option. Tax forms 1040ez   This is any listed option that, for an options dealer: Is an equity option, Is bought or granted by that dealer in the normal course of the dealer's business activity of dealing in options, and Is listed on the qualified board of exchange where that dealer is registered. Tax forms 1040ez   An “options dealer” is any person registered with an appropriate national securities exchange as a market maker or specialist in listed options. Tax forms 1040ez Equity option. Tax forms 1040ez   This is any option: To buy or sell stock, or That is valued directly or indirectly by reference to any stock or narrow-based security index. Tax forms 1040ez  Equity options include options on a group of stocks only if the group is a narrow-based stock index. Tax forms 1040ez Dealer securities futures contract. Tax forms 1040ez   For any dealer in securities futures contracts or options on those contracts, this is a securities futures contract (or option on such a contract) that: Is entered into by the dealer (or, in the case of an option, is purchased or granted by the dealer) in the normal course of the dealer's activity of dealing in this type of contract (or option), and Is traded on a qualified board or exchange (as defined under Regulated futures contract , earlier). Tax forms 1040ez A securities futures contract that is not a dealer securities futures contract is treated as described later under Securities Futures Contracts . Tax forms 1040ez Marked-to-Market Rules A section 1256 contract that you hold at the end of the tax year will generally be treated as sold at its fair market value on the last business day of the tax year, and you must recognize any gain or loss that results. Tax forms 1040ez That gain or loss is taken into account in figuring your gain or loss when you later dispose of the contract, as shown in the example under 60/40 rule, below. Tax forms 1040ez Hedging exception. Tax forms 1040ez   The marked-to-market rules do not apply to hedging transactions. Tax forms 1040ez See Hedging Transactions , later. Tax forms 1040ez 60/40 rule. Tax forms 1040ez   Under the marked-to-market system, 60% of your capital gain or loss will be treated as a long-term capital gain or loss, and 40% will be treated as a short-term capital gain or loss. Tax forms 1040ez This is true regardless of how long you actually held the property. Tax forms 1040ez Example. Tax forms 1040ez On June 22, 2012, you bought a regulated futures contract for $50,000. Tax forms 1040ez On December 31, 2012 (the last business day of your tax year), the fair market value of the contract was $57,000. Tax forms 1040ez You recognized a $7,000 gain on your 2012 tax return, treated as 60% long-term and 40% short-term capital gain. Tax forms 1040ez On February 1, 2013, you sold the contract for $56,000. Tax forms 1040ez Because you recognized a $7,000 gain on your 2012 return, you recognize a $1,000 loss ($57,000 − $56,000) on your 2013 tax return, treated as 60% long-term and 40% short-term capital loss. Tax forms 1040ez Limited partners or entrepreneurs. Tax forms 1040ez   The 60/40 rule does not apply to dealer equity options or dealer securities futures contracts that result in capital gain or loss allocable to limited partners or limited entrepreneurs (defined later under Hedging Transactions ). Tax forms 1040ez Instead, these gains or losses are treated as short term. Tax forms 1040ez Terminations and transfers. Tax forms 1040ez   The marked-to-market rules also apply if your obligation or rights under section 1256 contracts are terminated or transferred during the tax year. Tax forms 1040ez In this case, use the fair market value of each section 1256 contract at the time of termination or transfer to determine the gain or loss. Tax forms 1040ez Terminations or transfers may result from any offsetting, delivery, exercise, assignment, or lapse of your obligation or rights under section 1256 contracts. Tax forms 1040ez Loss carryback election. Tax forms 1040ez   An individual having a net section 1256 contracts loss (defined later), generally can elect to carry this loss back 3 years instead of carrying it over to the next year. Tax forms 1040ez See How To Report , later, for information about reporting this election on your return. Tax forms 1040ez   The loss carried back to any year under this election cannot be more than the net section 1256 contracts gain in that year. Tax forms 1040ez In addition, the amount of loss carried back to an earlier tax year cannot increase or produce a net operating loss for that year. Tax forms 1040ez   The loss is carried to the earliest carryback year first, and any unabsorbed loss amount can then be carried to each of the next 2 tax years. Tax forms 1040ez In each carryback year, treat 60% of the carryback amount as a long-term capital loss and 40% as a short-term capital loss from section 1256 contracts. Tax forms 1040ez   If only a portion of the net section 1256 contracts loss is absorbed by carrying the loss back, the unabsorbed portion can be carried forward, under the capital loss carryover rules, to the year following the loss. Tax forms 1040ez (See Capital Losses under Reporting Capital Gains and Losses, later. Tax forms 1040ez ) Figure your capital loss carryover as if, for the loss year, you had an additional short-term capital gain of 40% of the amount of net section 1256 contracts loss absorbed in the carryback years and an additional long-term capital gain of 60% of the absorbed loss. Tax forms 1040ez In the carryover year, treat any capital loss carryover from losses on section 1256 contracts as if it were a loss from section 1256 contracts for that year. Tax forms 1040ez Net section 1256 contracts loss. Tax forms 1040ez   This loss is the lesser of: The net capital loss for your tax year determined by taking into account only the gains and losses from section 1256 contracts, or The capital loss carryover to the next tax year determined without this election. Tax forms 1040ez Net section 1256 contracts gain. Tax forms 1040ez   This gain is the lesser of: The capital gain net income for the carryback year determined by taking into account only gains and losses from section 1256 contracts, or The capital gain net income for that year. Tax forms 1040ez  Figure your net section 1256 contracts gain for any carryback year without regard to the net section 1256 contracts loss for the loss year or any later tax year. Tax forms 1040ez Traders in section 1256 contracts. Tax forms 1040ez   Gain or loss from the trading of section 1256 contracts is capital gain or loss subject to the marked-to-market rules. Tax forms 1040ez However, this does not apply to contracts held for purposes of hedging property if any loss from the property would be an ordinary loss. Tax forms 1040ez Treatment of underlying property. Tax forms 1040ez   The determination of whether an individual's gain or loss from any property is ordinary or capital gain or loss is made without regard to the fact that the individual is actively engaged in dealing in or trading section 1256 contracts related to that property. Tax forms 1040ez How To Report If you disposed of regulated futures or foreign currency contracts in 2013 (or had unrealized profit or loss on these contracts that were open at the end of 2012 or 2013), you should receive Form 1099-B, or substitute statement, from your broker. Tax forms 1040ez Form 6781. Tax forms 1040ez   Use Part I of Form 6781 to report your gains and losses from all section 1256 contracts that are open at the end of the year or that were closed out during the year. Tax forms 1040ez This includes the amount shown in box 10 of Form 1099-B. Tax forms 1040ez Then enter the net amount of these gains and losses on Schedule D (Form 1040), line 4 or line 11, as appropriate. Tax forms 1040ez Include a copy of Form 6781 with your income tax return. Tax forms 1040ez   If the Form 1099-B you receive includes a straddle or hedging transaction, defined later, it may be necessary to show certain adjustments on Form 6781. Tax forms 1040ez Follow the Form 6781 instructions for completing Part I. Tax forms 1040ez Loss carryback election. Tax forms 1040ez   To carry back your loss under the election procedures described earlier, file Form 1040X or Form 1045, Application for Tentative Refund, for the year to which you are carrying the loss with an amended Form 6781 and an amended Schedule D (Form 1040) attached. Tax forms 1040ez Follow the instructions for completing Form 6781 for the loss year to make this election. Tax forms 1040ez Hedging Transactions The marked-to-market rules, described earlier, do not apply to hedging transactions. Tax forms 1040ez A transaction is a hedging transaction if both of the following conditions are met. Tax forms 1040ez You entered into the transaction in the normal course of your trade or business primarily to manage the risk of: Price changes or currency fluctuations on ordinary property you hold (or will hold), or Interest rate or price changes, or currency fluctuations, on your current or future borrowings or ordinary obligations. Tax forms 1040ez You clearly identified the transaction as being a hedging transaction before the close of the day on which you entered into it. Tax forms 1040ez This hedging transaction exception does not apply to transactions entered into by or for any syndicate. Tax forms 1040ez A syndicate is a partnership, S corporation, or other entity (other than a regular corporation) that allocates more than 35% of its losses to limited partners or limited entrepreneurs. Tax forms 1040ez A limited entrepreneur is a person who has an interest in an enterprise (but not as a limited partner) and who does not actively participate in its management. Tax forms 1040ez However, an interest is not considered held by a limited partner or entrepreneur if the interest holder actively participates (or did so for at least 5 full years) in the management of the entity, or is the spouse, child (including a legally adopted child), grandchild, or parent of an individual who actively participates in the management of the entity. Tax forms 1040ez Hedging loss limit. Tax forms 1040ez   If you are a limited partner or entrepreneur in a syndicate, the amount of a hedging loss you can claim is limited. Tax forms 1040ez A “hedging loss” is the amount by which the allowable deductions in a tax year that resulted from a hedging transaction (determined without regard to the limit) are more than the income received or accrued during the tax year from this transaction. Tax forms 1040ez   Any hedging loss allocated to you for the tax year is limited to your taxable income for that year from the trade or business in which the hedging transaction occurred. Tax forms 1040ez Ignore any hedging transaction items in determining this taxable income. Tax forms 1040ez If you have a hedging loss that is disallowed because of this limit, you can carry it over to the next tax year as a deduction resulting from a hedging transaction. Tax forms 1040ez   If the hedging transaction relates to property other than stock or securities, the limit on hedging losses applies if the limited partner or entrepreneur is an individual. Tax forms 1040ez   The limit on hedging losses does not apply to any hedging loss to the extent that it is more than all your unrecognized gains from hedging transactions at the end of the tax year that are from the trade or business in which the hedging transaction occurred. Tax forms 1040ez The term “unrecognized gain” has the same meaning as defined under Loss Deferral Rules in Straddles, later. Tax forms 1040ez Sale of property used in a hedge. Tax forms 1040ez   Once you identify personal property as being part of a hedging transaction, you must treat gain from its sale or exchange as ordinary income, not capital gain. Tax forms 1040ez Self-Employment Income Gains and losses derived in the ordinary course of a commodity or option dealer's trading in section 1256 contracts and property related to these contracts are included in net earnings from self-employment. Tax forms 1040ez See the Instructions for Schedule SE (Form 1040). Tax forms 1040ez In addition, the rules relating to contributions to self-employment retirement plans apply. Tax forms 1040ez For information on retirement plan contributions, see Publication 560 and Publication 590. Tax forms 1040ez Basis of Investment Property Basis is a way of measuring your investment in property for tax purposes. Tax forms 1040ez You must know the basis of your property to determine whether you have a gain or loss on its sale or other disposition. Tax forms 1040ez Investment property you buy normally has an original basis equal to its cost. Tax forms 1040ez If you get property in some way other than buying it, such as by gift or inheritance, its fair market value may be important in figuring the basis. Tax forms 1040ez Cost Basis The basis of property you buy is usually its cost. Tax forms 1040ez The cost is the amount you pay in cash, debt obligations, or other property or services. Tax forms 1040ez Unstated interest. Tax forms 1040ez   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 forms 1040ez You generally have unstated interest if your interest rate is less than the applicable federal rate. Tax forms 1040ez For more information, see Unstated Interest and Original Issue Discount (OID) in Publication 537. Tax forms 1040ez Basis Other Than Cost There are times when you must use a basis other than cost. Tax forms 1040ez In these cases, you may need to know the property's fair market value or the adjusted basis of the previous owner. Tax forms 1040ez Fair market value. Tax forms 1040ez   This is the price at which the property would change hands between a buyer and a seller, neither being forced to buy or sell and both having reasonable knowledge of all the relevant facts. Tax forms 1040ez Sales of similar property, around the same date, may be helpful in figuring fair market value. Tax forms 1040ez Property Received for Services If you receive investment property for services, you must include the property's fair market value in income. Tax forms 1040ez The amount you include in income then becomes your basis in the property. Tax forms 1040ez If the services were performed for a price that was agreed to beforehand, this price will be accepted as the fair market value of the property if there is no evidence to the contrary. Tax forms 1040ez Restricted property. Tax forms 1040ez   If you receive, as payment for services, property that is subject to certain restrictions, your basis in the property generally is its fair market value when it becomes substantially vested. Tax forms 1040ez Property becomes substantially vested when it is transferable or is no longer subject to substantial risk of forfeiture, whichever happens first. Tax forms 1040ez See Restricted Property in Publication 525 for more information. Tax forms 1040ez Bargain purchases. Tax forms 1040ez   If you buy investment property at less than fair market value, as payment for services, you must include the difference in income. Tax forms 1040ez Your basis in the property is the price you pay plus the amount you include in income. Tax forms 1040ez Property Received in Taxable Trades If you received investment property in trade for other property, the basis of the new property is its fair market value at the time of the trade unless you received the property in a nontaxable trade. Tax forms 1040ez Example. Tax forms 1040ez You trade A Company stock for B Company stock having a fair market value of $1,200. Tax forms 1040ez If the adjusted basis of the A Company stock is less than $1,200, you have a taxable gain on the trade. Tax forms 1040ez If the adjusted basis of the A Company stock is more than $1,200, you have a deductible loss on the trade. Tax forms 1040ez The basis of your B Company stock is $1,200. Tax forms 1040ez If you later sell the B Company stock for $1,300, you will have a gain of $100. Tax forms 1040ez Property Received in Nontaxable Trades If you have a nontaxable trade, you do not recognize gain or loss until you dispose of the property you received in the trade. Tax forms 1040ez See Nontaxable Trades , later. Tax forms 1040ez The basis of property you received in a nontaxable or partly nontaxable trade is generally the same as the adjusted basis of the property you gave up. Tax forms 1040ez Increase this amount by any cash you paid, additional costs you had, and any gain recognized. Tax forms 1040ez Reduce this amount by any cash or unlike property you received, any loss recognized, and any liability of yours that was assumed or treated as assumed. Tax forms 1040ez Property Received From Your Spouse If property is transferred to you from your spouse (or former spouse, if the transfer is incident to your divorce), your basis is the same as your spouse's or former spouse's adjusted basis just before the transfer. Tax forms 1040ez See Transfers Between Spouses , later. Tax forms 1040ez Recordkeeping. Tax forms 1040ez The transferor must give you the records necessary to determine the adjusted basis and holding period of the property as of the date of the transfer. Tax forms 1040ez Property Received as a Gift To figure your basis in property that you received as a gift, you must know its adjusted basis to the donor just before it was given to you, its fair market value at the time it was given to you, the amount of any gift tax paid on it, and the date it was given to you. Tax forms 1040ez Fair market value less than donor's adjusted basis. Tax forms 1040ez   If the fair market value of the property at the time of the gift was less than the donor's adjusted basis just before the gift, your basis for gain on its sale or other disposition is the same as the donor's adjusted basis plus or minus any required adjustments to basis during the period you hold the property. Tax forms 1040ez Your basis for loss is its fair market value at the time of the gift plus or minus any required adjustments to basis during the period you hold the property. Tax forms 1040ez No gain or loss. Tax forms 1040ez   If you use the basis for figuring a gain and the result is a loss, and then use the basis for figuring a loss and the result is a gain, you will have neither a gain nor a loss. Tax forms 1040ez Example. Tax forms 1040ez You receive a gift of investment property having an adjusted basis of $10,000 at the time of the gift. Tax forms 1040ez The fair market value at the time of the gift is $9,000. Tax forms 1040ez You later sell the property for $9,500. Tax forms 1040ez You have neither gain nor loss. Tax forms 1040ez Your basis for figuring gain is $10,000, and $9,500 minus $10,000 results in a $500 loss. Tax forms 1040ez Your basis for figuring loss is $9,000, and $9,500 minus $9,000 results in a $500 gain. Tax forms 1040ez Fair market value equal to or more than donor's adjusted basis. Tax forms 1040ez   If the fair market value of the property at the time of the gift was equal to or more than the donor's adjusted basis just before the gift, your basis for gain or loss on its sale or other disposition is the donor's adjusted basis plus or minus any required adjustments to basis during the period you hold the property. Tax forms 1040ez Also, you may be allowed to add to the donor's adjusted basis all or part of any gift tax paid, depending on the date of the gift. Tax forms 1040ez Gift received before 1977. Tax forms 1040ez   If you received property as a gift before 1977, your basis in the property is the donor's adjusted basis increased by the total gift tax paid on the gift. Tax forms 1040ez However, your basis cannot be more than the fair market value of the gift at the time it was given to you. Tax forms 1040ez Example 1. Tax forms 1040ez You were given XYZ Company stock in 1976. Tax forms 1040ez At the time of the gift, the stock had a fair market value of $21,000. Tax forms 1040ez The donor's adjusted basis was $20,000. Tax forms 1040ez The donor paid a gift tax of $500 on the gift. Tax forms 1040ez Your basis for gain or loss is $20,500, the donor's adjusted basis plus the amount of gift tax paid. Tax forms 1040ez Example 2. Tax forms 1040ez The facts are the same as in Example 1 except that the gift tax paid was $1,500. Tax forms 1040ez Your basis is $21,000, the donor's adjusted basis plus the gift tax paid, but limited to the fair market value of the stock at the time of the gift. Tax forms 1040ez Gift received after 1976. Tax forms 1040ez   If you received property as a gift after 1976, your basis is the donor's adjusted basis increased by the part of the gift tax paid that was for the net increase in value of the gift. Tax forms 1040ez You figure this part by multiplying the gift tax paid on the gift by a fraction. Tax forms 1040ez The numerator (top part) is the net increase in value of the gift and the denominator (bottom part) is the amount of the gift. Tax forms 1040ez   The net increase in value of the gift is the fair market value of the gift minus the donor's adjusted basis. Tax forms 1040ez 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 forms 1040ez Example. Tax forms 1040ez In 2013, you received a gift of property from your mother. Tax forms 1040ez At the time of the gift, the property had a fair market value of $101,000 and an adjusted basis to her of $40,000. Tax forms 1040ez The amount of the gift for gift tax purposes was $87,000 ($101,000 minus the $14,000 annual exclusion), and your mother paid a gift tax of $21,000. Tax forms 1040ez You figure your basis in the following way: Fair market value $101,000 Minus: Adjusted basis 40,000 Net increase in value of gift $61,000 Gift tax paid $21,000 Multiplied by . Tax forms 1040ez 701 ($61,000 ÷ $87,000) . Tax forms 1040ez 701 Gift tax due to net increase in value $14,721 Plus: Adjusted basis of property to  your mother 40,000 Your basis in the property $54,721 Part sale, part gift. Tax forms 1040ez   If you get property in a transfer that is partly a sale and partly a gift, your basis is the larger of the amount you paid for the property or the transferor's adjusted basis in the property at the time of the transfer. Tax forms 1040ez Add to that amount the amount of any gift tax paid on the gift, as described in the preceding discussion. Tax forms 1040ez For figuring loss, your basis is limited to the property's fair market value at the time of the transfer. Tax forms 1040ez Gift tax information. Tax forms 1040ez   For information on gift tax, see Publication 950, Introduction to Estate and Gift Taxes. Tax forms 1040ez For information on figuring the amount of gift tax to add to your basis, see Property Received as a Gift in Publication 551. Tax forms 1040ez Property Received as Inheritance Before or after 2010. Tax forms 1040ez   If you inherited property from a decedent who died before or after 2010, or who died in 2010 and the executor of the decedent's estate elected not to file Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent, your basis in that property generally is its fair market value (its appraised value on Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return) on: The date of the decedent's death, or The later alternate valuation date if the estate qualifies for, and elects to use, alternate valuation. Tax forms 1040ez If no Form 706 was filed, use the appraised value on the date of death for state inheritance or transmission taxes. Tax forms 1040ez For stocks and bonds, if no Form 706 was filed and there are no state inheritance or transmission taxes, see the Form 706 instructions for figuring the fair market value of the stocks and bonds on the date of the decedent's death. Tax forms 1040ez Appreciated property you gave the decedent. Tax forms 1040ez   Your basis in certain appreciated property that you inherited is the decedent's adjusted basis in the property immediately before death rather than its fair market value. Tax forms 1040ez This applies to appreciated property that you or your spouse gave the decedent as a gift during the 1-year period ending on the date of death. Tax forms 1040ez Appreciated property is any property whose fair market value on the day you gave it to the decedent was more than its adjusted basis. Tax forms 1040ez More information. Tax forms 1040ez   See Publication 551 for more information on the basis of inherited property, including community property, property held by a surviving tenant in a joint tenancy or tenancy by the entirety, a qualified joint interest, and a farm or closely held business. Tax forms 1040ez Inherited in 2010 and executor elected to file Form 8939. Tax forms 1040ez   If you inherited property from a decedent who died in 2010 and the executor made the election to file Form 8939, see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, to figure your basis. Tax forms 1040ez Adjusted Basis Before you can figure any gain or loss on a sale, exchange, or other disposition of property or figure allowable depreciation, depletion, or amortization, you usually must make certain adjustments (increases and decreases) to the basis of the property. Tax forms 1040ez The result of these adjustments to the basis is the adjusted basis. Tax forms 1040ez Adjustments to the basis of stocks and bonds are explained in the following discussion. Tax forms 1040ez For information about other adjustments to basis, see Publication 551. Tax forms 1040ez Stocks and Bonds The basis of stocks or bonds you own generally is the purchase price plus the costs of purchase, such as commissions and recording or transfer fees. Tax forms 1040ez If you acquired stock or bonds other than by purchase, your basis is usually determined by fair market value or the previous owner's adjusted basis as discussed earlier under Basis Other Than Cost . Tax forms 1040ez The basis of stock must be adjusted for certain events that occur after purchase. Tax forms 1040ez For example, if you receive more stock from nontaxable stock dividends or stock splits, you must reduce the basis of your original stock. Tax forms 1040ez You must also reduce your basis when you receive nondividend distributions (discussed in chapter 1). Tax forms 1040ez These distributions, up to the amount of your basis, are a nontaxable return of capital. Tax forms 1040ez The IRS partners with companies that offer Form 8949 and Schedule D (Form 1040) software that can import trades from many brokerage firms and accounting software to help you keep track of your adjusted basis in securities. Tax forms 1040ez To find out more, go to www. Tax forms 1040ez irs. Tax forms 1040ez gov/Filing/Filing-Options. Tax forms 1040ez Identifying stock or bonds sold. Tax forms 1040ez   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 forms 1040ez Adequate identification. Tax forms 1040ez   You will make an adequate identification if you show that certificates representing shares of stock from a lot that you bought on a certain date or for a certain price were delivered to your broker or other agent. Tax forms 1040ez Broker holds stock. Tax forms 1040ez   If you have left the stock certificates with your broker or other agent, you will make an adequate identification if you: Tell your broker or other agent the particular stock to be sold or transferred at the time of the sale or transfer, and Receive a written confirmation of this from your broker or other agent within a reasonable time. Tax forms 1040ez  Stock identified this way is the stock sold or transferred even if stock certificates from a different lot are delivered to the broker or other agent. Tax forms 1040ez Single stock certificate. Tax forms 1040ez   If you bought stock in different lots at different times and you hold a single stock certificate for this stock, you will make an adequate identification if you: Tell your broker or other agent the particular stock to be sold or transferred when you deliver the certificate to your broker or other agent, and Receive a written confirmation of this from your broker or other agent within a reasonable time. Tax forms 1040ez   If you sell part of the stock represented by a single certificate directly to the buyer instead of through a broker, you will make an adequate identification if you keep a written record of the particular stock that you intend to sell. Tax forms 1040ez Bonds. Tax forms 1040ez   These methods of identification also apply to bonds sold or transferred. Tax forms 1040ez Identification not possible. Tax forms 1040ez   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 forms 1040ez Except for certain mutual fund shares, discussed later, you cannot use the average price per share to figure gain or loss on the sale of the shares. Tax forms 1040ez Example. Tax forms 1040ez You bought 100 shares of stock of XYZ Corporation in 1998 for $10 a share. Tax forms 1040ez In January 1999 you bought another 200 shares for $11 a share. Tax forms 1040ez In July 1999 you gave your son 50 shares. Tax forms 1040ez In December 2001 you bought 100 shares for $9 a share. Tax forms 1040ez In April 2013 you sold 130 shares. Tax forms 1040ez You cannot identify the shares you disposed of, so you must use the stock you acquired first to figure the basis. Tax forms 1040ez The shares of stock you gave your son had a basis of $500 (50 × $10). Tax forms 1040ez You figure the basis of the 130 shares of stock you sold in 2013 as follows: 50 shares (50 × $10) balance of stock bought in 1998 $ 500 80 shares (80 × $11) stock bought in January 1999 880 Total basis of stock sold in 2013 $1,380 Shares in a mutual fund or REIT. Tax forms 1040ez    The basis of shares in a mutual fund (or other regulated investment company) or a real estate investment trust (REIT) is generally figured in the same way as the basis of other stock and usually includes any commissions or load charges paid for the purchase. Tax forms 1040ez Example. Tax forms 1040ez You bought 100 shares of Fund A for $10 a share. Tax forms 1040ez You paid a $50 commission to the broker for the purchase. Tax forms 1040ez Your cost basis for each share is $10. Tax forms 1040ez 50 ($1,050 ÷ 100). Tax forms 1040ez Commissions and load charges. Tax forms 1040ez   The fees and charges you pay to acquire or redeem shares of a mutual fund are not deductible. Tax forms 1040ez You can usually add acquisition fees and charges to your cost of the shares and thereby increase your basis. Tax forms 1040ez A fee paid to redeem the shares is usually a reduction in the redemption price (sales price). Tax forms 1040ez   You cannot add your entire acquisition fee or load charge to the cost of the mutual fund shares acquired if all of the following conditions apply. Tax forms 1040ez You get a reinvestment right because of the purchase of the shares or the payment of the fee or charge. Tax forms 1040ez You dispose of the shares within 90 days of the purchase date. Tax forms 1040ez You acquire new shares in the same mutual fund or another mutual fund, for which the fee or charge is reduced or waived because of the reinvestment right you got when you acquired the original shares. Tax forms 1040ez   The amount of the original fee or charge in excess of the reduction in (3) is added to the cost of the original shares. Tax forms 1040ez The rest of the original fee or charge is added to the cost basis of the new shares (unless all three conditions above also apply to the purchase of the new shares). Tax forms 1040ez Choosing average basis for mutual fund shares. Tax forms 1040ez   You can choose to use the average basis of mutual fund shares if you acquired the identical shares at various times and prices, or you acquired the shares after 2010 in connection with a dividend reinvestment plan, and left them on deposit in an account kept by a custodian or agent. Tax forms 1040ez The methods you can use to figure average basis are explained later. Tax forms 1040ez Undistributed capital gains. Tax forms 1040ez   If you had to include in your income any undistributed capital gains of the mutual fund or REIT, increase your basis in the stock by the difference between the amount you included and the amount of tax paid for you by the fund or REIT. Tax forms 1040ez See Undistributed capital gains of mutual funds and REITs under Capital Gain Distributions in chapter 1. Tax forms 1040ez Reinvestment right. Tax forms 1040ez   This is the right to acquire mutual fund shares in the same or another mutual fund without paying a fee or load charge, or by paying a reduced fee or load charge. Tax forms 1040ez      The original cost basis of mutual fund shares you acquire by reinvesting your distributions is the amount of the distributions used to purchase each full or fractional share. Tax forms 1040ez This rule applies even if the distribution is an exempt-interest dividend that you do not report as income. Tax forms 1040ez Table 4-1. Tax forms 1040ez This is a worksheet you can use to keep track of the adjusted basis of your mutual fund shares. Tax forms 1040ez Enter the cost per share when you acquire new shares and any adjustments to their basis when the adjustment occurs. Tax forms 1040ez This worksheet will help you figure the adjusted basis when you sell or redeem shares. Tax forms 1040ez Table 4-1. Tax forms 1040ez Mutual Fund Record Mutual Fund Acquired1 Adjustment to Basis Per Share Adjusted2 Basis Per Share Sold or redeemed Date Number of Shares Cost Per Share Date Number of Shares                                                                                                                                                                                                                                                                         1 Include share received from reinvestment of distributions. Tax forms 1040ez 2 Cost plus or minus adjustments. Tax forms 1040ez Automatic investment service. Tax forms 1040ez   If you participate in an automatic investment service, your basis for each share of stock, including fractional shares, bought by the bank or other agent is the purchase price plus a share of the broker's commission. Tax forms 1040ez Dividend reinvestment plans. Tax forms 1040ez   If you participate in a dividend reinvestment plan and receive stock from the corporation at a discount, your basis is the full fair market value of the stock on the dividend payment date. Tax forms 1040ez You must include the amount of the discount in your income. Tax forms 1040ez Public utilities. Tax forms 1040ez   If, before 1986, you excluded from income the value of stock you had received under a qualified public utility reinvestment plan, your basis in that stock is zero. Tax forms 1040ez Stock dividends. Tax forms 1040ez   Stock dividends are distributions made by a corporation of its own stock. Tax forms 1040ez Generally, stock dividends are not taxable to you. Tax forms 1040ez However, see Distributions of Stock and Stock Rights under Dividends and Other Distributions in chapter 1 for some exceptions. Tax forms 1040ez If the stock dividends are not taxable, you must divide your basis for the old stock between the old and new stock. Tax forms 1040ez New and old stock identical. Tax forms 1040ez   If the new stock you received as a nontaxable dividend is identical to the old stock on which the dividend was declared, divide the adjusted basis of the old stock by the number of shares of old and new stock. Tax forms 1040ez The result is your basis for each share of stock. Tax forms 1040ez Example 1. Tax forms 1040ez You owned one share of common stock that you bought for $45. Tax forms 1040ez The corporation distributed two new shares of common stock for each share held. Tax forms 1040ez You then had three shares of common stock. Tax forms 1040ez Your basis in each share is $15 ($45 ÷ 3). Tax forms 1040ez Example 2. Tax forms 1040ez You owned two shares of common stock. Tax forms 1040ez You bought one for $30 and the other for $45. Tax forms 1040ez The corporation distributed two new shares of common stock for each share held. Tax forms 1040ez You had six shares after the distribution—three with a basis of $10 each ($30 ÷ 3) and three with a basis of $15 each ($45 ÷ 3). Tax forms 1040ez New and old stock not identical. Tax forms 1040ez   If the new stock you received as a nontaxable dividend is not identical to the old stock on which it was declared, the basis of the new stock is calculated differently. Tax forms 1040ez Divide the adjusted basis of the old stock between the old and the new stock in the ratio of the fair market value of each lot of stock to the total fair market value of both lots on the date of distribution of the new stock. Tax forms 1040ez Example. Tax forms 1040ez You bought a share of common stock for $100. Tax forms 1040ez Later, the corporation distributed a share of preferred stock for each share of common stock held. Tax forms 1040ez At the date of distribution, your common stock had a fair market value of $150 and the preferred stock had a fair market value of $50. Tax forms 1040ez You figure the basis of the old and new stock by dividing your $100 basis between them. Tax forms 1040ez The basis of your common stock is $75 (($150 ÷ $200) × $100), and the basis of the new preferred stock is $25 (($50 ÷ $200) × $100). Tax forms 1040ez Stock bought at various times. Tax forms 1040ez   Figure the basis of stock dividends received on stock you bought at various times and at different prices by allocating to each lot of stock the share of the stock dividends due to it. Tax forms 1040ez Taxable stock dividends. Tax forms 1040ez   If your stock dividend is taxable when you receive it, the basis of your new stock is its fair market value on the date of distribution. Tax forms 1040ez The basis of your old stock does not change. Tax forms 1040ez Stock splits. Tax forms 1040ez   Figure the basis of stock splits in the same way as stock dividends if identical stock is distributed on the stock held. Tax forms 1040ez Stock rights. Tax forms 1040ez   A stock right is a right to acquire a corporation's stock. Tax forms 1040ez It may be exercised, it may be sold if it has a market value, or it may expire. Tax forms 1040ez Stock rights are rarely taxable when you receive them. Tax forms 1040ez See Distributions of Stock and Stock Rights under Dividends and Other Distributions in chapter 1. Tax forms 1040ez Taxable stock rights. Tax forms 1040ez   If you receive stock rights that are taxable, the basis of the rights is their fair market value at the time of distribution. Tax forms 1040ez The basis of the old stock does not change. Tax forms 1040ez Nontaxable stock rights. Tax forms 1040ez   If you receive nontaxable stock rights and allow them to expire, they have no basis. Tax forms 1040ez   If you exercise or sell the nontaxable stock rights and if, at the time of distribution, the stock rights had a fair market value of 15% or more of the fair market value of the old stock, you must divide the adjusted basis of the old stock between the old stock and the stock rights. Tax forms 1040ez Use a ratio of the fair market value of each to the total fair market value of both at the time of distribution. Tax forms 1040ez   If the fair market value of the stock rights was less than 15%, their basis is zero. Tax forms 1040ez However, you can choose to divide the basis of the old stock between the old stock and the stock rights. Tax forms 1040ez To make the choice, attach a statement to your return for the year in which you received the rights, stating that you choose to divide the basis of the stock. Tax forms 1040ez Basis of new stock. Tax forms 1040ez   If you exercise the stock rights, the basis of the new stock is its cost plus the basis of the stock rights exercised. Tax forms 1040ez Example. Tax forms 1040ez You own 100 shares of ABC Company stock, which cost you $22 per share. Tax forms 1040ez The ABC Company gave you 10 nontaxable stock rights that would allow you to buy 10 more shares at $26 per share. Tax forms 1040ez At the time the stock rights were distributed, the stock had a market value of $30, not including the stock rights. Tax forms 1040ez Each stock right had a market value of $3. Tax forms 1040ez The market value of the stock rights was less than 15% of the market value of the stock, but you chose to divide the basis of your stock between the stock and the rights. Tax forms 1040ez You figure the basis of the rights and the basis of the old stock as follows: 100 shares × $22 = $2,200, basis of old stock   100 shares × $30 = $3,000, market value of old stock   10 rights × $3 = $30, market value of rights   ($3,000 ÷ $3,030) × $2,200 = $2,178. Tax forms 1040ez 22, new basis of old stock   ($30 ÷ $3,030) × $2,200 = $21. Tax forms 1040ez 78, basis of rights   If you sell the rights, the basis for figuring gain or loss is $2. Tax forms 1040ez 18 ($21. Tax forms 1040ez 78 ÷ 10) per right. Tax forms 1040ez If you exercise the rights, the basis of the stock you acquire is the price you pay ($26) plus the basis of the right exercised ($2. Tax forms 1040ez 18), or $28. Tax forms 1040ez 18 per share. Tax forms 1040ez The remaining basis of the old stock is $21. Tax forms 1040ez 78 per share. Tax forms 1040ez Investment property received in liquidation. Tax forms 1040ez   In general, if you receive investment property as a distribution in partial or complete liquidation of a corporation and if you recognize gain or loss when you acquire the property, your basis in the property is its fair market value at the time of the distribution. Tax forms 1040ez S corporation stock. Tax forms 1040ez   You must increase your basis in stock of an S corporation by your pro rata share of the following items. Tax forms 1040ez All income items of the S corporation, including tax-exempt income, that are separately stated and passed through to you as a shareholder. Tax forms 1040ez The nonseparately stated income of the S corporation. Tax forms 1040ez The amount of the deduction for depletion (other than oil and gas depletion) that is more than the basis of the property being depleted. Tax forms 1040ez   You must decrease your basis in stock of an S corporation by your pro rata share of the following items. Tax forms 1040ez Distributions by the S corporation that were not included in your income. Tax forms 1040ez All loss and deduction items of the S corporation that are separately stated and passed through to you. Tax forms 1040ez Any nonseparately stated loss of the S corporation. Tax forms 1040ez Any expense of the S corporation that is not deductible in figuring its taxable income and not properly chargeable to a capital account. Tax forms 1040ez The amount of your deduction for depletion of oil and gas wells to the extent the deduction is not more than your share of the adjusted basis of the wells. Tax forms 1040ez However, your basis in the stock cannot be reduced below zero. Tax forms 1040ez Specialized small business investment company stock or partnership interest. Tax forms 1040ez   If you bought this stock or interest as replacement property for publicly traded securities you sold at a gain, you must reduce the basis of the stock or interest by the amount of any postponed gain on that sale. Tax forms 1040ez See Rollover of Gain From Publicly Traded Securities , later. Tax forms 1040ez Qualified small business stock. Tax forms 1040ez   If you bought this stock as replacement property for other qualified small business stock you sold at a gain, you must reduce the basis of this replacement stock by the amount of any postponed gain on the earlier sale. Tax forms 1040ez See Gains on Qualified Small Business Stock , later. Tax forms 1040ez Short sales. Tax forms 1040ez   If you cannot deduct payments you make to a lender in lieu of dividends on stock used in a short sale, the amount you pay to the lender is a capital expense, and you must add it to the basis of the stock used to close the short sale. Tax forms 1040ez   See Payments in lieu of dividends , later, for information about deducting payments in lieu of dividends. Tax forms 1040ez Premiums on bonds. Tax forms 1040ez   If you buy a bond at a premium, the premium is treated as part of your basis in the bond. Tax forms 1040ez If you choose to amortize the premium paid on a taxable bond, you must reduce the basis of the bond by the amortized part of the premium each year over the life of the bond. Tax forms 1040ez   Although you cannot deduct the premium on a tax-exempt bond, you must amortize it to determine your adjusted basis in the bond. Tax forms 1040ez You must reduce the basis of the bond by the premium you amortized for the period you held the bond. Tax forms 1040ez   See Bond Premium Amortization in chapter 3 for more information. Tax forms 1040ez Market discount on bonds. Tax forms 1040ez   If you include market discount on a bond in income currently, increase the basis of your bond by the amount of market discount you include in your income. Tax forms 1040ez See Market Discount Bonds in chapter 1 for more information. Tax forms 1040ez Bonds purchased at par value. Tax forms 1040ez   A bond purchased at par value (face amount) has no premium or discount. Tax forms 1040ez When you sell or otherwise dispose of the bond, you figure the gain or loss by comparing the bond proceeds to the purchase price of the bond. Tax forms 1040ez Example. Tax forms 1040ez You purchased a bond several years ago for its par value of $10,000. Tax forms 1040ez You sold the bond this year for $10,100. Tax forms 1040ez You have a gain of $100. Tax forms 1040ez However, if you had sold the bond for $9,900, you would have a loss of $100. Tax forms 1040ez Acquisition discount on short-term obligations. Tax forms 1040ez   If you include acquisition discount on a short-term obligation in your income currently, increase the basis of the obligation by the amount of acquisition discount you include in your income. Tax forms 1040ez See Discount on Short-Term Obligations in chapter 1 for more information. Tax forms 1040ez Original issue discount (OID) on debt instruments. Tax forms 1040ez   Increase the basis of a debt instrument by the OID you include in your income. Tax forms 1040ez See Original Issue Discount (OID) in chapter 1. Tax forms 1040ez Discounted tax-exempt obligations. Tax forms 1040ez   OID on tax-exempt obligations is generally not taxable. Tax forms 1040ez However, when you dispose of a tax-exempt obligation issued after September 3, 1982, that you acquired after March 1, 1984, you must accrue OID on the obligation to determine its adjusted basis. Tax forms 1040ez The accrued OID is added to the basis of the obligation to determine your gain or loss. Tax forms 1040ez   For information on determining OID on a long-term obligation, see Debt Instruments Issued After July 1, 1982, and Before 1985 or Debt Instruments Issued After 1984, whichever applies, in Publication 1212 under Figuring OID on Long-Term Debt Instruments. Tax forms 1040ez   If the tax-exempt obligation has a maturity of 1 year or less, accrue OID under the rules for acquisition discount on short-term obligations. Tax forms 1040ez See Discount on Short-Term Obligations in chapter 1. Tax forms 1040ez Stripped tax-exempt obligation. Tax forms 1040ez   If you acquired a stripped tax-exempt bond or coupon after October 22, 1986, you must accrue OID on it to determine its adjusted basis when you dispose of it. Tax forms 1040ez For stripped tax-exempt bonds or coupons acquired after June 10, 1987, part of this OID may be taxable. Tax forms 1040ez You accrue the OID on these obligations in the manner described in chapter 1 under Stripped Bonds and Coupons . Tax forms 1040ez   Increase your basis in the stripped tax-exempt bond or coupon by the taxable and nontaxable accrued OID. Tax forms 1040ez Also increase your basis by the interest that accrued (but was not paid and was not previously reflected in your basis) before the date you sold the bond or coupon. Tax forms 1040ez In addition, for bonds acquired after June 10, 1987, add to your basis any accrued market discount not previously reflected in basis. Tax forms 1040ez How To Figure Gain or Loss You figure gain or loss on a sale or trade of property by comparing the amount you realize with the adjusted basis of the property. Tax forms 1040ez Gain. Tax forms 1040ez   If the amount you realize from a sale or trade is more than the adjusted basis of the property you transfer, the difference is a gain. Tax forms 1040ez Loss. Tax forms 1040ez   If the adjusted basis of the property you transfer is more than the amount you realize, the difference is a loss. Tax forms 1040ez Amount realized. Tax forms 1040ez   The amount you realize from a sale or trade of property is everything you receive for the property minus your expenses of sale (such as redemption fees, sales commissions, sales charges, or exit fees). Tax forms 1040ez Amount realized includes the money you receive plus the fair market value of any property or services you receive. Tax forms 1040ez   If you finance the buyer's purchase of your property and the debt instrument does not provide for adequate stated interest, the unstated interest that you must report as ordinary income will reduce the amount realized from the sale. Tax forms 1040ez For more information, see Publication 537. Tax forms 1040ez   If a buyer of property issues a debt instrument to the seller of the property, the amount realized is determined by reference to the issue price of the debt instrument, which may or may not be the fair market value of the debt instrument. Tax forms 1040ez See Regulations section 1. Tax forms 1040ez 1001-1(g). Tax forms 1040ez However, if the debt instrument was previously issued by a third party (one not part of the sale transaction), the fair market value of the debt instrument is used to determine the amount realized. Tax forms 1040ez Fair market value. Tax forms 1040ez   Fair market value is the price at which property would change hands between a buyer and a seller, neither being forced to buy or sell and both having reasonable knowledge of all the relevant facts. Tax forms 1040ez Example. Tax forms 1040ez You trade A Company stock with an adjusted basis of $7,000 for B Company stock with a fair market value of $10,000, which is your amount realized. Tax forms 1040ez Your gain is $3,000 ($10,000 – $7,000). Tax forms 1040ez If you also receive a note for $6,000 that has an issue price of $6,000, your gain is $9,000 ($10,000 + $6,000 – $7,000). Tax forms 1040ez Debt paid off. Tax forms 1040ez   A debt against the property, or against you, that is paid off as a part of the transaction or that is assumed by the buyer must be included in the amount realized. Tax forms 1040ez This is true even if neither you nor the buyer is personally liable for the debt. Tax forms 1040ez For example, if you sell or trade property that is subject to a nonrecourse loan, the amount you realize generally includes the full amount of the note assumed by the buyer even if the amount of the note is more than the fair market value of the property. Tax forms 1040ez Example. Tax forms 1040ez You sell stock that you had pledged as security for a bank loan of $8,000. Tax forms 1040ez Your basis in the stock is $6,000. Tax forms 1040ez The buyer pays off your bank loan and pays you $20,000 in cash. Tax forms 1040ez The amount realized is $28,000 ($20,000 + $8,000). Tax forms 1040ez Your gain is $22,000 ($28,000 – $6,000). Tax forms 1040ez Payment of cash. Tax forms 1040ez   If you trade property and cash for other property, the amount you realize is the fair market value of the property you receive. Tax forms 1040ez Determine your gain or loss by subtracting the cash you pay and the adjusted basis of the property you trade in from the amount you realize. Tax forms 1040ez If the result is a positive number, it is a gain. Tax forms 1040ez If the result is a negative number, it is a loss. Tax forms 1040ez No gain or loss. Tax forms 1040ez   You may have to use a basis for figuring gain that is different from the basis used for figuring loss. Tax forms 1040ez In this case, you may have neither a gain nor a loss. Tax forms 1040ez See No gain or loss in the discussion on the basis of property you received as a gift under Basis Other Than Cost, earlier. Tax forms 1040ez Special Rules for Mutual Funds To figure your gain or loss when you dispose of mutual fund shares, you need to determine which shares were sold and the basis of those shares. Tax forms 1040ez If your shares in a mutual fund were acquired all on the same day and for the same price, figuring their basis is not difficu
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The Tax Forms 1040ez

Tax forms 1040ez Index A Accelerated Cost Recovery System (ACRS), MACRS Depreciation (see also Modified Accelerated Cost Recovery System (MACRS)) Effective date, Depreciation Methods Accounting methods Accrual method, Accrual method. Tax forms 1040ez Cash method, Cash method. Tax forms 1040ez Change of method, Changing your accounting method. Tax forms 1040ez Constructive receipt of income, Cash method. Tax forms 1040ez , More information. Tax forms 1040ez Accrual method taxpayers, Accrual method. Tax forms 1040ez ACRS (Accelerated Cost Recovery System) Effective date, Depreciation Methods Active participation, Active participation. Tax forms 1040ez Activities not for profit, Duplex. Tax forms 1040ez Additions to property, Additions or improvements to property. Tax forms 1040ez (see also Improvements) Basis, Increases to basis. Tax forms 1040ez , Additions or improvements. Tax forms 1040ez MACRS recovery period, Additions or improvements to property. Tax forms 1040ez Adjusted basis MACRS depreciation, Adjusted Basis Adjusted gross income (AGI) Modified (see Modified adjusted gross income (MAGI)) Advance rent, Advance rent. Tax forms 1040ez Security deposits, Security deposits. Tax forms 1040ez Advertising, Types of Expenses Allocation of expenses Change of property to rental use, Payments added to capital account. Tax forms 1040ez How to divide expenses, Dividing Expenses Part of property rented, Renting Part of Property, How to divide expenses. Tax forms 1040ez Personal use of rental property, Personal use of rental property. Tax forms 1040ez , Personal Use of Dwelling Unit (Including Vacation Home) Alternative Depreciation System (ADS) Election of, Electing ADS MACRS, MACRS Depreciation, Table 2-2d. Tax forms 1040ez Alternative minimum tax (AMT) Accelerated depreciation methods, Alternative minimum tax (AMT). Tax forms 1040ez Amended returns, Filing an amended return. Tax forms 1040ez Apartments Basement apartments, Examples. Tax forms 1040ez Dwelling units, Dwelling unit. Tax forms 1040ez Appraisal fees, Settlement fees and other costs. Tax forms 1040ez Assessments for maintenance, Assessments for local improvements. Tax forms 1040ez Assessments, local (see Local assessments) Assistance (see Tax help) Assumption of mortgage, Assumption of a mortgage. Tax forms 1040ez Attorneys' fees, Settlement fees and other costs. Tax forms 1040ez , Increases to basis. Tax forms 1040ez Automobiles MACRS recovery periods, Property Classes Under GDS B Basis Adjusted basis, Adjusted Basis Assessments for local improvements, Assessments for local improvements. Tax forms 1040ez Basis other than cost, Basis Other Than Cost Cost basis, Cost Basis Decreases to, Decreases to basis. Tax forms 1040ez Deductions Capitalization of costs vs. Tax forms 1040ez , Deducting vs. Tax forms 1040ez capitalizing costs. Tax forms 1040ez Not greater than basis, Cost or Other Basis Fully Recovered Fair market value, Fair market value. Tax forms 1040ez Increases to, Increases to basis. Tax forms 1040ez MACRS depreciable basis, Basis of Depreciable Property Property changed to rental use, Basis of Property Changed to Rental Use C Capital expenditures Deductions vs. Tax forms 1040ez effect on basis, Deducting vs. Tax forms 1040ez capitalizing costs. Tax forms 1040ez Local benefit taxes, Local benefit taxes. Tax forms 1040ez Mortgages, payments to obtain, Expenses paid to obtain a mortgage. Tax forms 1040ez Cars MACRS recovery periods, Property Classes Under GDS Cash method taxpayers, Cash method. Tax forms 1040ez Casualty losses, Exception for Rental Real Estate With Active Participation Change of accounting method, Changing your accounting method. Tax forms 1040ez Charitable contributions Use of property, Donation of use of the property. Tax forms 1040ez Cleaning and maintenance, Types of Expenses Closing costs, Settlement fees and other costs. Tax forms 1040ez Commissions, Types of Expenses Computers MACRS recovery periods, Property Classes Under GDS Condominiums, Condominiums, Dwelling unit. Tax forms 1040ez Constructive receipt of income, Cash method. Tax forms 1040ez , More information. Tax forms 1040ez Cooperative housing, Cooperative apartments. Tax forms 1040ez , Cooperatives, Dwelling unit. Tax forms 1040ez Cost basis, Cost Basis Credit reports, Settlement fees and other costs. Tax forms 1040ez Credits Residential energy credits, Decreases to basis. Tax forms 1040ez D Days of personal use, What is a day of personal use? Days used for repairs and maintenance, Days used for repairs and maintenance. Tax forms 1040ez Deductions Capitalizing costs vs. Tax forms 1040ez effect on basis, Deducting vs. Tax forms 1040ez capitalizing costs. Tax forms 1040ez Depreciation (see Depreciation) Limitations on, Form 4562. Tax forms 1040ez Passive activity losses (see Passive activity) Depreciation, Depreciation of Rental Property, Changing your accounting method. Tax forms 1040ez Alternative Depreciation System (ADS) (see Modified Accelerated Cost Recovery System (MACRS)) Basis (see Basis) Change of accounting method, Changing your accounting method. Tax forms 1040ez Change of property to rental use, Property Changed to Rental Use Claiming correct amount of, Claiming the Correct Amount of Depreciation Declining balance method, Depreciation Methods Duration of property expected to last more than one year, What Rental Property Can Be Depreciated? Eligible property, What Rental Property Can Be Depreciated? First-year expensing, Section 179 deduction. Tax forms 1040ez MACRS (see Modified Accelerated Cost Recovery System (MACRS)) Methods, Depreciation Methods, Figuring Your Depreciation Deduction Ownership of property, What Rental Property Can Be Depreciated?, Property you own. Tax forms 1040ez Rental expense, Depreciation. Tax forms 1040ez Rented property, Rented property. Tax forms 1040ez Section 179 deduction, Section 179 deduction. Tax forms 1040ez Special depreciation allowances, Claiming the Special Depreciation Allowance Straight line method, Depreciation Methods Useful life, What Rental Property Can Be Depreciated?, Property having a determinable useful life. Tax forms 1040ez Vacant rental property, Vacant rental property. Tax forms 1040ez Discount, bonds and notes issued at (see Original issue discount (OID)) Dividing of expenses (see Allocation of expenses) Dwelling units Definition, Dwelling unit. Tax forms 1040ez Fair rental price, Fair rental price. Tax forms 1040ez Personal use of, Personal Use of Dwelling Unit (Including Vacation Home), What is a day of personal use? E Easements, Decreases to basis. Tax forms 1040ez Equipment rental expense, Rental of equipment. Tax forms 1040ez F Fair market value (FMV), Fair market value. Tax forms 1040ez Fair rental price, Dividing Expenses, Fair rental price. Tax forms 1040ez Fees Loan origination fees, Points, Settlement fees and other costs. Tax forms 1040ez Points (see Points) Settlement fees and other costs, Settlement fees and other costs. Tax forms 1040ez Tax return preparation fees, Legal and other professional fees. Tax forms 1040ez First-year expensing, Section 179 deduction. Tax forms 1040ez Form 1040 Not rented for profit income, Where to report. Tax forms 1040ez Part of property rented, Renting Part of Property Rental income and expenses, Reporting Rental Income, Expenses, and Losses Schedule E, Schedule E (Form 1040) Form 1098 Mortgage interest, Form 1098, Mortgage Interest Statement. Tax forms 1040ez Form 4684 Casualties and thefts, How to report. Tax forms 1040ez Form 4797 Sales of business property, How to report. Tax forms 1040ez Form 8582 Passive activity losses, Form 8582. Tax forms 1040ez , Form 8582 not required. Tax forms 1040ez Free tax services, Free help with your tax return. Tax forms 1040ez G Gains and losses At-risk rules, At-Risk Rules Casualty and theft losses, Exception for Rental Real Estate With Active Participation Limits on rental losses, Form 4562. Tax forms 1040ez Passive activity losses, Passive Activity Limits Rental real estate activities, Exception for Rental Real Estate With Active Participation Sale of rental property, Sale or exchange of rental property. Tax forms 1040ez , How to report. Tax forms 1040ez General depreciation system (GDS) (see Modified Accelerated Cost Recovery System (MACRS)) H Help (see Tax help) Home Main home, Main home. Tax forms 1040ez Use as rental property (see Use of home) I Improvements, Table 1-1. Tax forms 1040ez Examples of Improvements (see also Repairs) Assessments for local improvements, Assessments for local improvements. Tax forms 1040ez Basis, Increases to basis. Tax forms 1040ez , Additions or improvements. Tax forms 1040ez Depreciation of rented property, Rented property. Tax forms 1040ez MACRS recovery period, Additions or improvements to property. Tax forms 1040ez Insurance, Types of Expenses Casualty or theft loss payments, Decreases to basis. Tax forms 1040ez Change of property to rental use, Property Changed to Rental Use Fire insurance premiums, cost basis, Settlement fees and other costs. Tax forms 1040ez Part of property rented, Renting Part of Property Premiums paid in advance, Insurance premiums paid in advance. Tax forms 1040ez Title insurance, cost basis, Settlement fees and other costs. Tax forms 1040ez Interest payments, Interest expense. Tax forms 1040ez (see also Mortgages) Loan origination fees, Points Rental expenses, Types of Expenses L Land Cost basis, Separating cost of land and buildings. Tax forms 1040ez Depreciation, Land. Tax forms 1040ez Leases Cancellation payments, Canceling a lease. Tax forms 1040ez Equipment leasing, Rental of equipment. Tax forms 1040ez Limits Passive activity losses and credits, Passive Activity Limits Rental losses, Limits on Rental Losses Loans Assumption fees, Settlement fees and other costs. Tax forms 1040ez Charges connected with getting or refinancing, cost basis, Settlement fees and other costs. Tax forms 1040ez Low or no interest, Loans with low or no interest. Tax forms 1040ez Origination fees, Points Local assessments, Assessments for local improvements. Tax forms 1040ez Losses (see Gains and losses) M Missing children, photographs of, Reminders Modified Accelerated Cost Recovery System (MACRS), MACRS Depreciation, Figuring MACRS Depreciation Under ADS Additions or improvements to property, Additions or improvements to property. Tax forms 1040ez Adjusted basis, Adjusted Basis Alternative Depreciation System (ADS), MACRS Depreciation, Figuring MACRS Depreciation Under ADS Basis other than cost, Basis Other Than Cost Conventions, Conventions Cost basis, Cost Basis Depreciable basis, Basis of Depreciable Property Effective date, Depreciation Methods Excluded property, Excluded Property General Depreciation System (GDS), MACRS Depreciation, Property Classes Under GDS, Figuring Your Depreciation Deduction Nonresidential rental property, Property Classes Under GDS Property used in rental activities (Table 2-1), Table 2-1. Tax forms 1040ez MACRS Recovery Periods for Property Used in Rental Activities Recovery periods, Table 2-1. Tax forms 1040ez MACRS Recovery Periods for Property Used in Rental Activities, 5-, 7-, or 15-year property. Tax forms 1040ez Residential rental property, Property Classes Under GDS, Residential rental property. Tax forms 1040ez Special depreciation allowances, Claiming the Special Depreciation Allowance Modified adjusted gross income (MAGI), Modified adjusted gross income (MAGI). Tax forms 1040ez Mortgages, Expenses paid to obtain a mortgage. Tax forms 1040ez Assumption of, cost basis, Assumption of a mortgage. Tax forms 1040ez Change of property to rental use, Property Changed to Rental Use End of, OID, Loan or mortgage ends. Tax forms 1040ez Interest, Interest expense. Tax forms 1040ez , Property Changed to Rental Use, Renting Part of Property Mortgage insurance premiums, Settlement fees and other costs. Tax forms 1040ez Part of property rented, Renting Part of Property N Nonresidential real property, Property Classes Under GDS Not-for-profit activities, Duplex. Tax forms 1040ez O Original issue discount (OID), Points, Loan or mortgage ends. Tax forms 1040ez P Part interest Expenses, Part interest. Tax forms 1040ez Income, Part interest. Tax forms 1040ez Passive activity Maximum special allowance, Maximum special allowance. Tax forms 1040ez Personal property Rental income from, Property or services. Tax forms 1040ez Personal use of rental property, Payments added to capital account. Tax forms 1040ez , Personal Use of Dwelling Unit (Including Vacation Home) (see also Property changed to rental use) Placed-in-service date, Placed in Service Points, Types of Expenses, Points, Settlement fees and other costs. Tax forms 1040ez Pre-rental expenses, Pre-rental expenses. Tax forms 1040ez Principal residence (see Home) Profit, property not rented for, Duplex. Tax forms 1040ez Property changed to rental use, Payments added to capital account. Tax forms 1040ez Basis, Basis of Property Changed to Rental Use Publications (see Tax help) R Real estate professionals, Real estate professionals. Tax forms 1040ez Real estate taxes, Real estate taxes. Tax forms 1040ez Real property trades or businesses, Real property trades or businesses. Tax forms 1040ez Recordkeeping requirements Travel and transportation expenses, Local transportation expenses. Tax forms 1040ez , Travel expenses. Tax forms 1040ez Recovery periods, Property Classes Under GDS Rent, Settlement fees and other costs. Tax forms 1040ez Advance rent, Advance rent. Tax forms 1040ez Fair price, Fair rental price. Tax forms 1040ez Rental expenses, Rental Expenses Advertising, Types of Expenses Allocation between rental and personal uses, Dividing Expenses Change of property to rental use, Property Changed to Rental Use Cleaning and maintenance, Types of Expenses Commissions, Types of Expenses Depreciation, Depreciation. Tax forms 1040ez Dwelling unit used as home, Dwelling Unit Used as a Home Equipment rental, Rental of equipment. Tax forms 1040ez Home, property also used as, Rental of property also used as your home. Tax forms 1040ez Improvements, Table 1-1. Tax forms 1040ez Examples of Improvements Insurance, Types of Expenses, Insurance premiums paid in advance. Tax forms 1040ez Interest payments, Types of Expenses, Interest expense. Tax forms 1040ez Local transportation expenses, Types of Expenses, Local transportation expenses. Tax forms 1040ez Part of property rented, Renting Part of Property Points, Types of Expenses, Points Pre-rental expenses, Pre-rental expenses. Tax forms 1040ez Rental payments, Types of Expenses Repairs, Types of Expenses, Repairs and Improvements Sale of property, Vacant while listed for sale. Tax forms 1040ez Tax return preparation fees, Legal and other professional fees. Tax forms 1040ez Taxes, Types of Expenses Tenant, paid by, Expenses paid by tenant. Tax forms 1040ez Travel expenses, Types of Expenses Utilities, Types of Expenses Vacant rental property, Vacant rental property. Tax forms 1040ez Rental income Advance rent, Advance rent. Tax forms 1040ez Cancellation of lease payments, Canceling a lease. Tax forms 1040ez Dwelling unit used as home, Dwelling Unit Used as a Home Lease with option to buy, Lease with option to buy. Tax forms 1040ez Not rented for profit, Not Rented for Profit Part interest, Part interest. Tax forms 1040ez Property received from tenant, Property or services. Tax forms 1040ez Reporting, Accrual method. Tax forms 1040ez , Which Forms To Use Security deposit, Security deposits. Tax forms 1040ez Services received from tenant, Property or services. Tax forms 1040ez Uncollected rent, Uncollected rent. Tax forms 1040ez Used as home, Rental of property also used as your home. Tax forms 1040ez Rental losses, Exception for Rental Real Estate With Active Participation (see also Gains and losses) (see also Passive activity) Repairs, Types of Expenses, Repairs and Improvements (see also Improvements) Assessments for maintenance, Assessments for local improvements. Tax forms 1040ez Personal use of rental property exception for days used for repairs and maintenance, Days used for repairs and maintenance. Tax forms 1040ez S Sale of property Expenses, Vacant while listed for sale. Tax forms 1040ez Gain or loss, Sale or exchange of rental property. Tax forms 1040ez , How to report. Tax forms 1040ez Main home, Sale of main home used as rental property. Tax forms 1040ez Section 179 deductions, Section 179 deduction. Tax forms 1040ez Security deposits, Security deposits. Tax forms 1040ez Settlement fees, Settlement fees and other costs. Tax forms 1040ez Shared equity financing agreements, Shared equity financing agreement. Tax forms 1040ez Special depreciation allowances, Claiming the Special Depreciation Allowance Spouse Material participation, Participating spouse. Tax forms 1040ez Standard mileage rates, Local transportation expenses. Tax forms 1040ez Surveys, Settlement fees and other costs. Tax forms 1040ez T Tables and figures Improvements, examples of (Table 1-1), Table 1-1. Tax forms 1040ez Examples of Improvements MACRS optional tables (Table 2-2d), Table 2-2d. Tax forms 1040ez MACRS optional tables (Tables 2-2a, 2-2b, and 2-2c), Tables 2-2a, 2-2b, and 2-2c. Tax forms 1040ez MACRS recovery periods for property used in rental activities (Table 2-1), Table 2-1. Tax forms 1040ez MACRS Recovery Periods for Property Used in Rental Activities Tax credits Residential energy credits, effect on basis, Decreases to basis. Tax forms 1040ez Tax help, How To Get Tax Help Tax return preparation fees, Legal and other professional fees. Tax forms 1040ez Taxes Deduction of, Types of Expenses Local benefit taxes, Local benefit taxes. Tax forms 1040ez Real estate taxes, Real estate taxes. Tax forms 1040ez Transfer taxes, Settlement fees and other costs. Tax forms 1040ez Theft losses, Theft. Tax forms 1040ez Title insurance, Settlement fees and other costs. Tax forms 1040ez Transfer taxes, Settlement fees and other costs. Tax forms 1040ez Travel and transportation expenses Local transportation expenses, Types of Expenses, Local transportation expenses. Tax forms 1040ez Recordkeeping, Travel expenses. Tax forms 1040ez Rental expenses, Types of Expenses Standard mileage rate, Local transportation expenses. Tax forms 1040ez U Uncollected rent Income, Uncollected rent. Tax forms 1040ez Use of home Before or after renting, Days used as a main home before or after renting. Tax forms 1040ez Change to rental use, Property Changed to Rental Use Days of personal use, What is a day of personal use? Fair rental price, Fair rental price. Tax forms 1040ez Passive activity rules exception, Exception for Personal Use of Dwelling Unit Personal use as dwelling unit, Personal Use of Dwelling Unit (Including Vacation Home) Utilities, Types of Expenses, Increases to basis. Tax forms 1040ez V Vacant rental property, Vacant rental property. Tax forms 1040ez Vacation homes Dwelling unit, Dwelling unit. Tax forms 1040ez Fair rental price, Fair rental price. Tax forms 1040ez Personal use of, Personal Use of Dwelling Unit (Including Vacation Home) Valuation Fair market value, Fair market value. Tax forms 1040ez Prev  Up     Home   More Online Publications