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Turbotax For 2011 Tax Year

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Turbotax For 2011 Tax Year

Turbotax for 2011 tax year 4. Turbotax for 2011 tax year   Detailed Examples Table of Contents These examples use actual forms to help you prepare your income tax return. Turbotax for 2011 tax year However, the information shown on the filled-in forms is not from any actual person or scenario. Turbotax for 2011 tax year Example 1—Mortgage loan modification. Turbotax for 2011 tax year    In 2007, Nancy Oak bought a main home for $435,000. Turbotax for 2011 tax year Nancy took out a $420,000 mortgage loan to buy the home and made a down payment of $15,000. Turbotax for 2011 tax year The loan was secured by the home. Turbotax for 2011 tax year The mortgage loan was a recourse debt, meaning that Nancy was personally liable for the debt. Turbotax for 2011 tax year In 2008, Nancy took out a second mortgage loan (also a recourse debt) in the amount of $30,000 that was used to substantially improve her kitchen. Turbotax for 2011 tax year    In 2011, when the outstanding principal of the first and second mortgage loans was $440,000, Nancy refinanced the two recourse loans into one recourse loan in the amount of $475,000. Turbotax for 2011 tax year The FMV of Nancy's home at the time of the refinancing was $500,000. Turbotax for 2011 tax year Nancy used the additional $35,000 debt ($475,000 new mortgage loan minus $440,000 outstanding principal of Nancy's first and second mortgage loans immediately before the refinancing) to pay off personal credit cards and to pay college tuition for her son. Turbotax for 2011 tax year After the refinancing, Nancy has qualified principal residence indebtedness in the amount of $440,000 because the refinanced debt is qualified principal residence indebtedness only to the extent the amount of debt is not more than the old mortgage principal just before the refinancing. Turbotax for 2011 tax year   In 2013, Nancy was unable to make her mortgage loan payments. Turbotax for 2011 tax year On August 31, 2013, when the outstanding balance of her refinanced mortgage loan was still $475,000 and the FMV of the property was $425,000, Nancy's bank agreed to a loan modification (a “workout”) that resulted in a $40,000 reduction in the principal balance of her loan. Turbotax for 2011 tax year Nancy was neither insolvent nor in bankruptcy at the time of the loan modification. Turbotax for 2011 tax year   Nancy received a 2013 Form 1099-C from her bank in January 2014 showing canceled debt of $40,000 in box 2. Turbotax for 2011 tax year Identifiable event code "F" appears in box 6. Turbotax for 2011 tax year This box shows the reason the creditor has filed Form 1099-C. Turbotax for 2011 tax year To determine if she must include the canceled debt in her income, Nancy must determine whether she meets any of the exceptions or exclusions that apply to canceled debts. Turbotax for 2011 tax year Nancy determines that the only exception or exclusion that applies to her is the qualified principal residence indebtedness exclusion. Turbotax for 2011 tax year   Next, Nancy determines the amount, if any, of the $40,000 of canceled debt that was qualified principal residence indebtedness. Turbotax for 2011 tax year Although Nancy has $440,000 of qualified principal residence indebtedness, part of her loan ($35,000) was not qualified principal residence indebtedness because it was used to pay off personal credit cards and college tuition for her son. Turbotax for 2011 tax year Applying the ordering rule, the qualified principal residence indebtedness exclusion applies only to the extent the amount canceled is more than the amount of the debt (immediately before the cancellation) that is not qualified principal residence indebtedness. Turbotax for 2011 tax year Thus, Nancy can exclude only $5,000 of the canceled debt as qualified principal residence indebtedness ($40,000 amount canceled minus $35,000 nonqualified debt). Turbotax for 2011 tax year   Because Nancy does not meet any other exception or exclusion, she checks only the box on line 1e of Form 982 and enters $5,000 on line 2. Turbotax for 2011 tax year Nancy must also enter $5,000 on line 10b and reduce the basis of her main home by the $5,000 she excluded from income, bringing the adjusted basis in her home to $460,000 ($435,000 purchase price plus $30,000 substantial improvement minus $5,000). Turbotax for 2011 tax year Nancy must also include the $35,000 nonqualified debt portion in income on Form 1040, line 21. Turbotax for 2011 tax year You can see Nancy's Form 1099-C and a portion of her Form 1040 below. Turbotax for 2011 tax year Nancy's 2013 Form 1099-C, Cancellation of Debt This image is too large to be displayed in the current screen. Turbotax for 2011 tax year Please click the link to view the image. Turbotax for 2011 tax year Form 1099-C, Cancellation of Debt Nancy's 2013 Form 1040 This image is too large to be displayed in the current screen. Turbotax for 2011 tax year Please click the link to view the image. Turbotax for 2011 tax year Form 1040, U. Turbotax for 2011 tax year S. Turbotax for 2011 tax year Individual Income Tax Nancy's Form 982 This image is too large to be displayed in the current screen. Turbotax for 2011 tax year Please click the link to view the image. Turbotax for 2011 tax year Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)              Example 2—Mortgage loan foreclosure. Turbotax for 2011 tax year    In 2005, John and Mary Elm bought a main home for $335,000. Turbotax for 2011 tax year John and Mary took out a $320,000 mortgage loan to buy the home and made a down payment of $15,000. Turbotax for 2011 tax year The loan was secured by the home and is a recourse debt, meaning John and Mary are personally liable for the debt. Turbotax for 2011 tax year   John and Mary became unable to make their mortgage loan payments and on March 1, 2013, when the outstanding balance of the mortgage loan was $315,000 and the FMV of the property was $290,000, the bank foreclosed on the property and simultaneously canceled the remaining mortgage debt. Turbotax for 2011 tax year Immediately before the foreclosure, John and Mary's only other assets and liabilities were a checking account with a balance of $6,000, retirement savings of $13,000, and credit card debt of $5,500. Turbotax for 2011 tax year   John and Mary received a 2013 Form 1099-C showing canceled debt of $25,000 in box 2 ($315,000 outstanding balance minus $290,000 FMV) and an FMV of $290,000 in box 7. Turbotax for 2011 tax year Identifiable event code "D" appears in box 6. Turbotax for 2011 tax year This box shows the reason the creditor has filed Form 1099-C. Turbotax for 2011 tax year In order to determine if John and Mary must include the canceled debt in income, they must first determine whether they meet any of the exceptions or exclusions that apply to canceled debts. Turbotax for 2011 tax year In this example, John and Mary meet both the insolvency and qualified principal residence indebtedness exclusions. Turbotax for 2011 tax year Their sample Form 1099-C is shown on this page. Turbotax for 2011 tax year   John and Mary complete the insolvency worksheet and determine that they were insolvent immediately before the cancellation because at that time their liabilities exceeded the FMV of their assets by $11,500 ($320,500 total liabilities minus $309,000 FMV of total assets). Turbotax for 2011 tax year However, because the entire debt canceled is qualified principal residence indebtedness, the insolvency exclusion only applies if John and Mary elect to apply the insolvency exclusion instead of the qualified principal residence exclusion. Turbotax for 2011 tax year   John and Mary do not elect to apply the insolvency exclusion instead of the qualified principal residence exclusion because under the insolvency exclusion their exclusion would be limited to the amount by which they were insolvent ($11,500). Turbotax for 2011 tax year Instead, John and Mary check box 1e of Form 982 to exclude the canceled debt under the qualified principal residence exclusion. Turbotax for 2011 tax year Under the qualified principal residence exclusion, the amount that John and Mary can exclude is not limited because their qualified principal residence indebtedness is not more than $2 million and no portion of the loan was nonqualified debt. Turbotax for 2011 tax year As a result, John and Mary enter the full $25,000 of canceled debt on line 2 of Form 982. Turbotax for 2011 tax year Because John and Mary no longer own the home due to the foreclosure, John and Mary have no remaining basis in the home at the time of the debt cancellation. Turbotax for 2011 tax year Thus, John and Mary leave line 10b of Form 982 blank. Turbotax for 2011 tax year   John and Mary must also determine whether they have a gain or loss from the foreclosure. Turbotax for 2011 tax year John and Mary complete Table 1-1 (shown below) and find that they have a $45,000 loss from the foreclosure. Turbotax for 2011 tax year Because this loss relates to their home, it is a nondeductible loss. Turbotax for 2011 tax year   John and Mary's Form 1099-C, Insolvency Worksheet, and Form 982 follow. Turbotax for 2011 tax year John and Mary's 2013 Form 1099-C, Cancellation of Debt This image is too large to be displayed in the current screen. Turbotax for 2011 tax year Please click the link to view the image. Turbotax for 2011 tax year Form 1099-C, Cancellation of Debt Table 1-1. Turbotax for 2011 tax year Worksheet for Foreclosures and Repossessions (for John and Mary Elm) Part 1. Turbotax for 2011 tax year Complete Part 1 only if you were personally liable for the debt (even if none of the debt was canceled). Turbotax for 2011 tax year Otherwise, go to Part 2. Turbotax for 2011 tax year 1. Turbotax for 2011 tax year Enter the amount of outstanding debt immediately before the transfer of property reduced by any amount for which you remain personally liable immediately after the transfer of property $315,000. Turbotax for 2011 tax year 00 2. Turbotax for 2011 tax year Enter the fair market value of the transferred property $290,000. Turbotax for 2011 tax year 00 3. Turbotax for 2011 tax year Ordinary income from the cancellation of debt upon foreclosure or repossession. Turbotax for 2011 tax year * Subtract line 2 from line 1. Turbotax for 2011 tax year If less than zero, enter zero. Turbotax for 2011 tax year Next, go to Part 2 $ 25,000. Turbotax for 2011 tax year 00 Part 2. Turbotax for 2011 tax year Gain or loss from foreclosure or repossession. Turbotax for 2011 tax year   4. Turbotax for 2011 tax year Enter the smaller of line 1 or line 2. Turbotax for 2011 tax year If you did not complete Part 1 (because you were not personally liable for the debt), enter the amount of outstanding debt immediately before the transfer of property $290,000. Turbotax for 2011 tax year 00 5. Turbotax for 2011 tax year Enter any proceeds you received from the foreclosure sale   6. Turbotax for 2011 tax year Add line 4 and line 5 $290,000. Turbotax for 2011 tax year 00 7. Turbotax for 2011 tax year Enter the adjusted basis of the transferred property $335,000. Turbotax for 2011 tax year 00 8. Turbotax for 2011 tax year Gain or loss from foreclosure or repossession. Turbotax for 2011 tax year Subtract line 7 from line 6 ($ 45,000. Turbotax for 2011 tax year 00) * The income may not be taxable. Turbotax for 2011 tax year See chapter 1 for more details. Turbotax for 2011 tax year Insolvency Worksheet—John and Mary Elm Date debt was canceled (mm/dd/yy) 03/01/13 Part I. Turbotax for 2011 tax year Total liabilities immediately before the cancellation (do not include the same liability in more than one category) Liabilities (debts) Amount Owed Immediately Before the Cancellation 1. Turbotax for 2011 tax year Credit card debt $ 5,500 2. Turbotax for 2011 tax year Mortgage(s) on real property (including first and second mortgages and home equity loans) (mortgage(s) can be on personal residence, any additional residence, or property held for investment or used in a trade or business) $ 315,000 3. Turbotax for 2011 tax year Car and other vehicle loans $ 4. Turbotax for 2011 tax year Medical bills owed $ 5. Turbotax for 2011 tax year Student loans $ 6. Turbotax for 2011 tax year Accrued or past-due mortgage interest $ 7. Turbotax for 2011 tax year Accrued or past-due real estate taxes $ 8. Turbotax for 2011 tax year Accrued or past-due utilities (water, gas, electric) $ 9. Turbotax for 2011 tax year Accrued or past-due child care costs $ 10. Turbotax for 2011 tax year Federal or state income taxes remaining due (for prior tax years) $ 11. Turbotax for 2011 tax year Judgments $ 12. Turbotax for 2011 tax year Business debts (including those owed as a sole proprietor or partner) $ 13. Turbotax for 2011 tax year Margin debt on stocks and other debt to purchase or secured by investment assets other than real property $ 14. Turbotax for 2011 tax year Other liabilities (debts) not included above $ 15. Turbotax for 2011 tax year Total liabilities immediately before the cancellation. Turbotax for 2011 tax year Add lines 1 through 14. Turbotax for 2011 tax year $ 320,500 Part II. Turbotax for 2011 tax year Fair market value (FMV) of assets owned immediately before the cancellation (do not include the FMV of the same asset in more than one category) Assets FMV Immediately Before  the Cancellation 16. Turbotax for 2011 tax year Cash and bank account balances $ 6,000 17. Turbotax for 2011 tax year Real property, including the value of land (can be main home, any additional home, or property held for investment or used in a trade or business) $ 290,000 18. Turbotax for 2011 tax year Cars and other vehicles $ 19. Turbotax for 2011 tax year Computers $ 20. Turbotax for 2011 tax year Household goods and furnishings (for example, appliances, electronics, furniture, etc. Turbotax for 2011 tax year ) $ 21. Turbotax for 2011 tax year Tools $ 22. Turbotax for 2011 tax year Jewelry $ 23. Turbotax for 2011 tax year Clothing $ 24. Turbotax for 2011 tax year Books $ 25. Turbotax for 2011 tax year Stocks and bonds $ 26. Turbotax for 2011 tax year Investments in coins, stamps, paintings, or other collectibles $ 27. Turbotax for 2011 tax year Firearms, sports, photographic, and other hobby equipment $ 28. Turbotax for 2011 tax year Interest in retirement accounts (IRA accounts, 401(k) accounts, and other retirement accounts) $ 13,000 29. Turbotax for 2011 tax year Interest in a pension plan $ 30. Turbotax for 2011 tax year Interest in education accounts $ 31. Turbotax for 2011 tax year Cash value of life insurance $ 32. Turbotax for 2011 tax year Security deposits with landlords, utilities, and others $ 33. Turbotax for 2011 tax year Interests in partnerships $ 34. Turbotax for 2011 tax year Value of investment in a business $ 35. Turbotax for 2011 tax year Other investments (for example, annuity contracts, guaranteed investment contracts, mutual funds, commodity accounts, interests in hedge funds, and options) $ 36. Turbotax for 2011 tax year Other assets not included above $ 37. Turbotax for 2011 tax year FMV of total assets immediately before the cancellation. Turbotax for 2011 tax year Add lines 16 through 36. Turbotax for 2011 tax year $ 309,000 Part III. Turbotax for 2011 tax year Insolvency 38. Turbotax for 2011 tax year Amount of Insolvency. Turbotax for 2011 tax year Subtract line 37 from line 15. Turbotax for 2011 tax year If zero or less, you are not insolvent. Turbotax for 2011 tax year $ 11,500 John and Mary's Form 982 This image is too large to be displayed in the current screen. Turbotax for 2011 tax year Please click the link to view the image. Turbotax for 2011 tax year Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)          Example 3—Mortgage loan foreclosure with debt exceeding $2 million limit. Turbotax for 2011 tax year    In 2011, Kathy and Frank Willow got married and entered into a contract with Hive Construction Corporation to build a house for $3,000,000 to be used as their main home. Turbotax for 2011 tax year Kathy and Frank made a $400,000 down payment and took out a $2,600,000 mortgage to finance the remaining cost of the house. Turbotax for 2011 tax year Kathy and Frank are personally liable for the mortgage loan, which is secured by the home. Turbotax for 2011 tax year   In November 2013, when the outstanding principal balance on the mortgage loan was $2,500,000, the FMV of the property fell to $1,750,000 and Kathy and Frank abandoned the property by permanently moving out. Turbotax for 2011 tax year The lender foreclosed on the property and, on December 5, 2013, sold the property to another buyer for $1,750,000. Turbotax for 2011 tax year On December 26, 2013, the lender canceled the remaining debt. Turbotax for 2011 tax year Kathy and Frank have no tax attributes other than basis of personal-use property. Turbotax for 2011 tax year   The lender issued a 2013 Form 1099-C to Kathy and Frank showing canceled debt of $750,000 in box 2 (the remaining balance on the $2,500,000 mortgage debt after application of the foreclosure sale proceeds) and $1,750,000 in box 7 (FMV of the property). Turbotax for 2011 tax year Identifiable event code "D" appears in box 6. Turbotax for 2011 tax year This box shows the reason the creditor has filed Form 1099-C. Turbotax for 2011 tax year Although Kathy and Frank abandoned the property, the lender did not need to also file a Form 1099-A because the lender canceled the debt in connection with the foreclosure in the same calendar year. Turbotax for 2011 tax year Kathy and Frank are filing a joint return for 2013. Turbotax for 2011 tax year   Because the foreclosure occurred prior to the debt cancellation, Kathy and Frank first calculate their gain or loss from the foreclosure using Table 1-1. Turbotax for 2011 tax year Because Kathy and Frank remained personally liable for the $750,000 debt remaining after the foreclosure ($2,500,000 outstanding debt immediately before the foreclosure minus $1,750,000 satisfied through the sale of the home), Kathy and Frank enter $1,750,000 on line 1 of Table 1-1 ($2,500,000 outstanding debt immediately before the foreclosure minus the $750,000 for which they remained liable). Turbotax for 2011 tax year Completing Table 1-1, Kathy and Frank find that they have no ordinary income from the cancellation of debt upon foreclosure and that they have a $1,250,000 loss. Turbotax for 2011 tax year Because this loss relates to their home, it is a nondeductible loss. Turbotax for 2011 tax year   Because the lender later canceled the remaining amount of the debt, Kathy and Frank must also determine whether that canceled debt is taxable. Turbotax for 2011 tax year Immediately before the cancellation, Kathy and Frank had $15,000 in a savings account, household furnishings with an FMV of $17,000, a car with an FMV of $10,000, and $18,000 in credit card debt. Turbotax for 2011 tax year Kathy and Frank also had the $750,000 remaining balance on the mortgage loan at that time. Turbotax for 2011 tax year The household furnishings originally cost $30,000. Turbotax for 2011 tax year The car had been fully paid off (so there was no related outstanding debt) and was originally purchased for $16,000. Turbotax for 2011 tax year Kathy and Frank had no adjustments to the cost basis of the car. Turbotax for 2011 tax year Kathy and Frank had no other assets or liabilities at the time of the cancellation. Turbotax for 2011 tax year Kathy and Frank complete the insolvency worksheet to calculate that they were insolvent to the extent of $726,000 immediately before the cancellation ($768,000 of total liabilities minus $42,000 FMV of total assets). Turbotax for 2011 tax year   At the beginning of 2014, Kathy and Frank had $9,000 in their savings account and $15,000 in credit card debt. Turbotax for 2011 tax year Kathy and Frank also owned the same car at that time (still with an FMV of $10,000 and basis of $16,000) and the same household furnishings (still with an FMV of $17,000 and a basis of $30,000). Turbotax for 2011 tax year Kathy and Frank had no other assets or liabilities at that time. Turbotax for 2011 tax year Kathy and Frank no longer own the home because the lender foreclosed on it in 2013. Turbotax for 2011 tax year   Because the canceled debt is qualified principal residence indebtedness, the insolvency exclusion does not apply unless Kathy and Frank elect to apply the insolvency exclusion instead of the qualified principal residence indebtedness exclusion. Turbotax for 2011 tax year The maximum amount that Kathy and Frank can treat as qualified principal residence indebtedness is $2,000,000. Turbotax for 2011 tax year The remaining $500,000 ($2,500,000 outstanding mortgage loan minus $2,000,000 limit on qualified principal residence indebtedness) is not qualified principal residence indebtedness. Turbotax for 2011 tax year Because only a part of the loan is qualified principal residence indebtedness, Kathy and Frank must apply the ordering rule to the canceled debt. Turbotax for 2011 tax year Under the ordering rule, the qualified principal residence indebtedness exclusion applies only to the extent that the amount canceled ($750,000) exceeds the amount of the loan (immediately before the cancellation) that is not qualified principal residence indebtedness ($500,000). Turbotax for 2011 tax year This means that Kathy and Frank can only exclude $250,000 ($750,000 amount canceled minus $500,000 nonqualified debt) under the qualified principal residence indebtedness exclusion. Turbotax for 2011 tax year   Kathy and Frank do not elect to have the insolvency exclusion apply instead of the qualified principal residence exclusion. Turbotax for 2011 tax year Nonetheless, they can still apply the insolvency exclusion to the $500,000 nonqualified debt because it is not qualified principal residence indebtedness. Turbotax for 2011 tax year Kathy and Frank can exclude the remaining $500,000 canceled debt under the insolvency exclusion because they were insolvent immediately before the cancellation to the extent of $726,000. Turbotax for 2011 tax year Thus, Kathy and Frank check the boxes on lines 1b and 1e of Form 982 and enter $750,000 on line 2 ($250,000 excluded under the qualified principal residence indebtedness exclusion plus $500,000 excluded under the insolvency exclusion). Turbotax for 2011 tax year   Next, Kathy and Frank reduce their tax attributes using Part II of Form 982. Turbotax for 2011 tax year Because Kathy and Frank no longer own the home due to the foreclosure, Kathy and Frank have no remaining basis in the home at the time of the debt cancellation. Turbotax for 2011 tax year Thus, Kathy and Frank leave line 10b of Form 982 blank. Turbotax for 2011 tax year However, Kathy and Frank are also excluding nonqualified debt under the insolvency exclusion. Turbotax for 2011 tax year As a result, Kathy and Frank must reduce the basis of property they own based on the amount of canceled debt they are excluding from income under the insolvency rules. Turbotax for 2011 tax year Because Kathy and Frank have no tax attributes other than basis of personal-use property to reduce, Kathy and Frank figure the amount they must include on line 10a of Form 982 by taking the smallest of: The $46,000 bases of their personal-use property held at the beginning of 2014 ($16,000 basis in the car plus $30,000 basis in household furnishings), The $500,000 of the nonbusiness debt (other than qualified principal residence indebtedness) that they are excluding from income on line 2 of Form 982, or The $43,000 excess of the total bases of the property and the amount of money they held immediately after the cancellation over their total liabilities immediately after the cancellation ($15,000 in savings account plus $30,000 basis in household furnishings plus $16,000 adjusted basis in car minus $18,000 credit card debt). Turbotax for 2011 tax year Kathy and Frank enter $43,000 on Form 982, line 10a and reduce their bases in the car and the household furnishings in proportion to the total adjusted bases in all their property. Turbotax for 2011 tax year Kathy and Frank reduce the basis in the car by $14,956. Turbotax for 2011 tax year 52 ($43,000 x $16,000/$46,000). Turbotax for 2011 tax year And they reduce the basis in the household furnishings by $28,043. Turbotax for 2011 tax year 48 ($43,000 x $30,000/$46,000). Turbotax for 2011 tax year   Following are Kathy and Frank's sample forms and worksheets. Turbotax for 2011 tax year Frank and Kathy's 2013 Form 1099-C, Cancellation of Debt This image is too large to be displayed in the current screen. Turbotax for 2011 tax year Please click the link to view the image. Turbotax for 2011 tax year Form 1099-C, Cancellation of Debt Table 1-1. Turbotax for 2011 tax year Worksheet for Foreclosures and Repossessions (for Frank and Kathy Willow) Part 1. Turbotax for 2011 tax year Complete Part 1 only if you were personally liable for the debt (even if none of the debt was canceled). Turbotax for 2011 tax year Otherwise, go to Part 2. Turbotax for 2011 tax year 1. Turbotax for 2011 tax year Enter the amount of outstanding debt immediately before the transfer of property reduced by any amount for which you remain personally liable immediately after the transfer of property $1,750,000. Turbotax for 2011 tax year 00 2. Turbotax for 2011 tax year Enter the fair market value of the transferred property $1,750,000. Turbotax for 2011 tax year 00 3. Turbotax for 2011 tax year Ordinary income from the cancellation of debt upon foreclosure or repossession. Turbotax for 2011 tax year * Subtract line 2 from line 1. Turbotax for 2011 tax year If less than zero, enter zero. Turbotax for 2011 tax year Next, go to Part 2 $0. Turbotax for 2011 tax year 00 Part 2. Turbotax for 2011 tax year Gain or loss from foreclosure or repossession. Turbotax for 2011 tax year   4. Turbotax for 2011 tax year Enter the smaller of line 1 or line 2. Turbotax for 2011 tax year If you did not complete Part 1 (because you were not personally liable for the debt), enter the amount of outstanding debt immediately before the transfer of property. Turbotax for 2011 tax year $1,750,000. Turbotax for 2011 tax year 00 5. Turbotax for 2011 tax year Enter any proceeds you received from the foreclosure sale   6. Turbotax for 2011 tax year Add line 4 and line 5 $1,750,000. Turbotax for 2011 tax year 00 7. Turbotax for 2011 tax year Enter the adjusted basis of the transferred property $3,000,000. Turbotax for 2011 tax year 00 8. Turbotax for 2011 tax year Gain or loss from foreclosure or repossession. Turbotax for 2011 tax year Subtract line 7 from line 6 ($1,250,000. Turbotax for 2011 tax year 00) * The income may not be taxable. Turbotax for 2011 tax year See chapter 1 for more details. Turbotax for 2011 tax year    Insolvency Worksheet—Frank and Kathy Willow Date debt was canceled (mm/dd/yy) 12/26/13 Part I. Turbotax for 2011 tax year Total liabilities immediately before the cancellation (do not include the same liability in more than one category) Liabilities (debts) Amount Owed Immediately Before the Cancellation 1. Turbotax for 2011 tax year Credit card debt $ 18,000 2. Turbotax for 2011 tax year Mortgage(s) on real property (including first and second mortgages and home equity loans) (mortgage(s) can be on personal residence, any additional residence, or property held for investment or used in a trade or business) $ 750,000 3. Turbotax for 2011 tax year Car and other vehicle loans $ 4. Turbotax for 2011 tax year Medical bills owed $ 5. Turbotax for 2011 tax year Student loans $ 6. Turbotax for 2011 tax year Accrued or past-due mortgage interest $ 7. Turbotax for 2011 tax year Accrued or past-due real estate taxes $ 8. Turbotax for 2011 tax year Accrued or past-due utilities (water, gas, electric) $ 9. Turbotax for 2011 tax year Accrued or past-due child care costs $ 10. Turbotax for 2011 tax year Federal or state income taxes remaining due (for prior tax years) $ 11. Turbotax for 2011 tax year Judgments $ 12. Turbotax for 2011 tax year Business debts (including those owed as a sole proprietor or partner) $ 13. Turbotax for 2011 tax year Margin debt on stocks and other debt to purchase or secured by investment assets other than real property $ 14. Turbotax for 2011 tax year Other liabilities (debts) not included above $ 15. Turbotax for 2011 tax year Total liabilities immediately before the cancellation. Turbotax for 2011 tax year Add lines 1 through 14. Turbotax for 2011 tax year $ 768,000 Part II. Turbotax for 2011 tax year Fair market value (FMV) of assets owned immediately before the cancellation (do not include the FMV of the same asset in more than one category) Assets FMV Immediately Before  the Cancellation 16. Turbotax for 2011 tax year Cash and bank account balances $ 15,000 17. Turbotax for 2011 tax year Real property, including the value of land (can be main home, any additional home, or property held for investment or used in a trade or business) $ 18. Turbotax for 2011 tax year Cars and other vehicles $ 10,000 19. Turbotax for 2011 tax year Computers $ 20. Turbotax for 2011 tax year Household goods and furnishings (for example, appliances, electronics, furniture, etc. Turbotax for 2011 tax year ) $ 17,000 21. Turbotax for 2011 tax year Tools $ 22. Turbotax for 2011 tax year Jewelry $ 23. Turbotax for 2011 tax year Clothing $ 24. Turbotax for 2011 tax year Books $ 25. Turbotax for 2011 tax year Stocks and bonds $ 26. Turbotax for 2011 tax year Investments in coins, stamps, paintings, or other collectibles $ 27. Turbotax for 2011 tax year Firearms, sports, photographic, and other hobby equipment $ 28. Turbotax for 2011 tax year Interest in retirement accounts (IRA accounts, 401(k) accounts, and other retirement accounts) $ 29. Turbotax for 2011 tax year Interest in a pension plan $ 30. Turbotax for 2011 tax year Interest in education accounts $ 31. Turbotax for 2011 tax year Cash value of life insurance $ 32. Turbotax for 2011 tax year Security deposits with landlords, utilities, and others $ 33. Turbotax for 2011 tax year Interests in partnerships $ 34. Turbotax for 2011 tax year Value of investment in a business $ 35. Turbotax for 2011 tax year Other investments (for example, annuity contracts, guaranteed investment contracts, mutual funds, commodity accounts, interests in hedge funds, and options) $ 36. Turbotax for 2011 tax year Other assets not included above $ 37. Turbotax for 2011 tax year FMV of total assets immediately before the cancellation. Turbotax for 2011 tax year Add lines 16 through 36. Turbotax for 2011 tax year $ 42,000 Part III. Turbotax for 2011 tax year Insolvency 38. Turbotax for 2011 tax year Amount of Insolvency. Turbotax for 2011 tax year Subtract line 37 from line 15. Turbotax for 2011 tax year If zero or less, you are not insolvent. Turbotax for 2011 tax year $ 726,000    Frank and Kathy's Form 982 This image is too large to be displayed in the current screen. Turbotax for 2011 tax year Please click the link to view the image. Turbotax for 2011 tax year Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) Prev  Up  Next   Home   More Online Publications
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The Turbotax For 2011 Tax Year

Turbotax for 2011 tax year Publication 915 - Additional Material Prev  Up  Next   Home   More Online Publications