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Download Irs Form 1040 2010

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Download Irs Form 1040 2010

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

Download irs form 1040 2010 8. Download irs form 1040 2010   Distributions and Rollovers Table of Contents DistributionsMinimum Required Distributions No Special 10-Year Tax Option Transfer of Interest in 403(b) ContractAfter-tax contributions. Download irs form 1040 2010 Permissive service credit. Download irs form 1040 2010 Tax-Free RolloversHardship exception to rollover rules. Download irs form 1040 2010 Eligible retirement plans. Download irs form 1040 2010 Nonqualifying distributions. Download irs form 1040 2010 Second rollover. Download irs form 1040 2010 Gift Tax Distributions Permissible distributions. Download irs form 1040 2010   Generally, a distribution cannot be made from a 403(b) account until the employee: Reaches age 59½, Has a severance from employment, Dies, Becomes disabled, In the case of elective deferrals, encounters financial hardship, or Has a qualified reservist distribution. Download irs form 1040 2010 In most cases, the payments you receive or that are made available to you under your 403(b) account are taxable in full as ordinary income. Download irs form 1040 2010 In general, the same tax rules apply to distributions from 403(b) plans that apply to distributions from other retirement plans. Download irs form 1040 2010 These rules are explained in Publication 575. Download irs form 1040 2010 Publication 575 also discusses the additional tax on early distributions from retirement plans. Download irs form 1040 2010 Retired public safety officers. Download irs form 1040 2010   If you are an eligible retired public safety officer, distributions of up to $3,000, made directly from your 403(b) plan to pay accident, health, or long-term care insurance, are not included in your taxable income. Download irs form 1040 2010 The premiums can be for you, your spouse, or your dependents. Download irs form 1040 2010   A public safety officer is a law enforcement officer, fire fighter, chaplain, or member of a rescue squad or ambulance crew. Download irs form 1040 2010   For additional information, see Publication 575. Download irs form 1040 2010 Distribution for active reservist. Download irs form 1040 2010   The 10% penalty for early withdrawals will not apply to a qualified reservist distribution attributable to elective deferrals from a 403(b) plan. Download irs form 1040 2010 A qualified reservist distribution is a distribution that is made: To an individual who is a reservist or national guardsman and who was ordered or called to active duty for a period in excess of 179 days or for an indefinite period; and During the period beginning on the date of the order or call to duty and ending at the close of the active duty period. Download irs form 1040 2010 Minimum Required Distributions You must receive all, or at least a certain minimum, of your interest accruing after 1986 in the 403(b) plan by April 1 of the calendar year following the later of the calendar year in which you become age 70½, or the calendar year in which you retire. Download irs form 1040 2010 Check with your employer, plan administrator, or provider to find out whether this rule also applies to pre-1987 accruals. Download irs form 1040 2010 If not, a minimum amount of these accruals must begin to be distributed by the later of the end of the calendar year in which you reach age 75 or April 1 of the calendar year following retirement. Download irs form 1040 2010 For each year thereafter, the minimum distribution must be made by the last day of the year. Download irs form 1040 2010 If you do not receive the required minimum distribution, you are subject to a nondeductible 50% excise tax on the difference between the required minimum distribution and the amount actually distributed. Download irs form 1040 2010 No Special 10-Year Tax Option A distribution from a 403(b) plan does not qualify as a lump-sum distribution. Download irs form 1040 2010 This means you cannot use the special 10-year tax option to calculate the taxable portion of a 403(b) distribution. Download irs form 1040 2010 For more information, see Publication 575. Download irs form 1040 2010 Transfer of Interest in 403(b) Contract Contract exchanges. Download irs form 1040 2010   If you transfer all or part of your interest from a 403(b) contract to another 403(b) contract (held in the same plan), the transfer is tax free, and is referred to as a contract exchange. Download irs form 1040 2010 This was previously known as a 90-24 transfer. Download irs form 1040 2010 A contract exchange is similar to a 90-24 transfer with one major difference. Download irs form 1040 2010 Previously, you were able to accomplish the transfer without your employer’s involvement. Download irs form 1040 2010 After September 24, 2007, all such transfers are accomplished through a contract exchange requiring your employer’s involvement. Download irs form 1040 2010 In addition, the plan must provide for the exchange and the transferred interest must be subject to the same or stricter distribution restrictions. Download irs form 1040 2010 Finally, your accumulated benefit after the exchange must be equal to what it was before the exchange. Download irs form 1040 2010   Transfers that do not satisfy this rule are plan distributions and are generally taxable as ordinary income. Download irs form 1040 2010 Plan-to-plan transfers. Download irs form 1040 2010   You may also transfer part or all of your interest from a 403(b) plan to another 403(b) plan if you are an employee of (or were formerly employed by) the employer of the plan to which you would like to transfer. Download irs form 1040 2010 Both the initial plan and the receiving plan must provide for transfers. Download irs form 1040 2010 Your accumulated benefit after the transfer must be at least equal to what it was before the transfer. Download irs form 1040 2010 The new plan’s restrictions on distributions must be the same or stricter than those of the original plan. Download irs form 1040 2010 Tax-free transfers for certain cash distributions. Download irs form 1040 2010   A tax-free transfer may also apply to a cash distribution of your 403(b) account from an insurance company that is subject to a rehabilitation, conservatorship, insolvency, or similar state proceeding. Download irs form 1040 2010 To receive tax-free treatment, you must do all of the following: Withdraw all the cash to which you are entitled in full settlement of your contract rights or, if less, the maximum permitted by the state. Download irs form 1040 2010 Reinvest the cash distribution in a single policy or contract issued by another insurance company or in a single custodial account subject to the same or stricter distribution restrictions as the original contract not later than 60 days after you receive the cash distribution. Download irs form 1040 2010 Assign all future distribution rights to the new contract or account for investment in that contract or account if you received an amount that is less than what you are entitled to because of state restrictions. Download irs form 1040 2010   In addition to the preceding requirements, you must provide the new insurer with a written statement containing all of the following information: The gross amount of cash distributed under the old contract. Download irs form 1040 2010 The amount of cash reinvested in the new contract. Download irs form 1040 2010 Your investment in the old contract on the date you receive your first cash distribution. Download irs form 1040 2010   Also, you must attach the following items to your timely filed income tax return in the year you receive the first distribution of cash. Download irs form 1040 2010 A copy of the statement you gave the new insurer. Download irs form 1040 2010 A statement that includes: The words ELECTION UNDER REV. Download irs form 1040 2010 PROC. Download irs form 1040 2010 92-44, The name of the company that issued the new contract, and The new policy number. Download irs form 1040 2010 Direct trustee-to-trustee transfer. Download irs form 1040 2010   If you make a direct trustee-to-trustee transfer, from your governmental 403(b) account to a defined benefit governmental plan, it may not be includible in gross income. Download irs form 1040 2010   The transfer amount is not includible in gross income if it is made to: Purchase permissive service credits, or Repay contributions and earnings that were previously refunded under a forfeiture of service credit under the plan, or under another plan maintained by a state or local government employer within the same state. Download irs form 1040 2010 After-tax contributions. Download irs form 1040 2010   For distributions beginning after December 31, 2006, after-tax contributions can be rolled over between a 403(b) plan and a defined benefit plan, IRA, or a defined contribution plan. Download irs form 1040 2010 If the rollover is to or from a 403(b) plan, it must occur through a direct trustee-to-trustee transfer. Download irs form 1040 2010 Permissive service credit. Download irs form 1040 2010   A permissive service credit is credit for a period of service recognized by a defined benefit governmental plan only if you voluntarily contribute to the plan an amount that does not exceed the amount necessary to fund the benefit attributable to the period of service and the amount contributed is in addition to the regular employee contribution, if any, under the plan. Download irs form 1040 2010   A permissive service credit may also include service credit for up to 5 years where there is no performance of service, or service credited to provide an increased benefit for service credit which a participant is receiving under the plan. Download irs form 1040 2010   Check with your plan administrator as to the type and extent of service that may be purchased by this transfer. Download irs form 1040 2010 Tax-Free Rollovers You can generally roll over tax free all or any part of a distribution from a 403(b) plan to a traditional IRA or a non-Roth eligible retirement plan, except for any nonqualifying distributions, described later. Download irs form 1040 2010 You may also roll over any part of a distribution from a 403(b) plan by converting it through a direct rollover, described below, to a Roth IRA. Download irs form 1040 2010 Conversion amounts are generally includible in your taxable income in the year of the distribution from your 403(b) account. Download irs form 1040 2010 See Publication 590 for more information about conversion into a Roth IRA. Download irs form 1040 2010 Note. Download irs form 1040 2010 A participant is required to roll over distribution amounts received within 60 days in order for the amount to be treated as nontaxable. Download irs form 1040 2010 Distribution amounts that are rolled over within the 60 days are not subject to the 10% early distribution penalty. Download irs form 1040 2010 Rollovers to and from 403(b) plans. Download irs form 1040 2010   You can generally roll over tax free all or any part of a distribution from an eligible retirement plan to a 403(b) plan. Download irs form 1040 2010 Beginning January 1, 2008, distributions from tax-qualified retirement plans and tax-sheltered annuities can be converted by making a direct rollover into a Roth IRA subject to the restrictions that currently apply to rollovers from a traditional IRA into a Roth IRA. Download irs form 1040 2010 Converted amounts are generally includible in your taxable income in the year of the distribution from your 403(b) account. Download irs form 1040 2010 See Publication 590 for more information on conversion into a Roth IRA. Download irs form 1040 2010   If a distribution includes both pre-tax contributions and after-tax contributions, the portion of the distribution that is rolled over is treated as consisting first of pre-tax amounts (contributions and earnings that would be includible in income if no rollover occurred). Download irs form 1040 2010 This means that if you roll over an amount that is at least as much as the pre-tax portion of the distribution, you do not have to include any of the distribution in income. Download irs form 1040 2010   For more information on rollovers and eligible retirement plans, see Publication 575. Download irs form 1040 2010 If you roll over money or other property from a 403(b) plan to an eligible retirement plan, see Publication 575 for information about possible effects on later distributions from the eligible retirement plan. Download irs form 1040 2010 Hardship exception to rollover rules. Download irs form 1040 2010   The IRS may waive the 60-day rollover period if the failure to waive such requirement would be against equity or good conscience, including cases of casualty, disaster, or other events beyond the reasonable control of an individual. Download irs form 1040 2010   To obtain a hardship exception, you must apply to the IRS for a waiver of the 60-day rollover requirement. Download irs form 1040 2010 You apply for the waiver by following the general instructions used in requesting a letter ruling. Download irs form 1040 2010 These instructions are stated in Revenue Procedure 2013-4, 2013-1 I. Download irs form 1040 2010 R. Download irs form 1040 2010 B. Download irs form 1040 2010 126 available at www. Download irs form 1040 2010 irs. Download irs form 1040 2010 gov/irb/2013-01_IRB/ar09. Download irs form 1040 2010 html, or see the latest annual update. Download irs form 1040 2010 You must also pay a user fee with the application. Download irs form 1040 2010 The user fee for a rollover that is less than $50,000 is $500. Download irs form 1040 2010 For rollovers that are $50,000 or more, see Revenue Procedure 2013-8, 2013-1 I. Download irs form 1040 2010 R. Download irs form 1040 2010 B. Download irs form 1040 2010 237 available at www. Download irs form 1040 2010 irs. Download irs form 1040 2010 gov/irb/2013-01_IRB/ar13. Download irs form 1040 2010 html, or see the latest annual update. Download irs form 1040 2010   In determining whether to grant a waiver, the IRS will consider all relevant facts and circumstances, including: Whether errors were made by the financial institution; Whether you were unable to complete the rollover due to death, disability, hospitalization, incarceration, restrictions imposed by a foreign country, or postal error; Whether you used the amount distributed (for example, in the case of payment by check, whether you cashed the check); and How much time has passed since the date of distribution. Download irs form 1040 2010   For additional information on rollovers, see Publication 590. Download irs form 1040 2010 Eligible retirement plans. Download irs form 1040 2010   The following are considered eligible retirement plans. Download irs form 1040 2010 Individual retirement arrangements. Download irs form 1040 2010 Roth IRA. Download irs form 1040 2010 403(b) plans. Download irs form 1040 2010 Government eligible 457 plans. Download irs form 1040 2010 Qualified retirement plans. Download irs form 1040 2010  If the distribution is from a designated Roth account, then the only eligible retirement plan is another designated Roth account or a Roth IRA. Download irs form 1040 2010 Nonqualifying distributions. Download irs form 1040 2010   You cannot roll over tax free: Minimum required distributions (generally required to begin at age 70½), Substantially equal payments over your life or life expectancy, Substantially equal payments over the joint lives or life expectancies of your beneficiary and you, Substantially equal payments for a period of 10 years or more, Hardship distributions, or Corrective distributions of excess contributions or excess deferrals, and any income allocable to the excess, or excess annual additions and any allocable gains. Download irs form 1040 2010 Rollover of nontaxable amounts. Download irs form 1040 2010    You may be able to roll over the nontaxable part of a distribution (such as your after-tax contributions) made to another eligible retirement plan, traditional IRA, or Roth IRA. Download irs form 1040 2010 The transfer must be made either through a direct rollover to an eligible plan that separately accounts for the taxable and nontaxable parts of the rollover or through a rollover to a traditional IRA or Roth IRA. Download irs form 1040 2010   If you roll over only part of a distribution that includes both taxable and nontaxable amounts, the amount you roll over is treated as coming first from the taxable part of the distribution. Download irs form 1040 2010 Direct rollovers of 403(b) plan distributions. Download irs form 1040 2010   You have the option of having your 403(b) plan make the rollover directly to a traditional IRA, Roth IRA, or new plan. Download irs form 1040 2010 Before you receive a distribution, your plan will give you information on this. Download irs form 1040 2010 It is generally to your advantage to choose this option because your plan will not withhold tax on the distribution if you choose it. Download irs form 1040 2010 Distribution received by you. Download irs form 1040 2010   If you receive a distribution that qualifies to be rolled over, you can roll over all or any part of the distribution. Download irs form 1040 2010 Generally, you will receive only 80% of the distribution because 20% must be withheld. Download irs form 1040 2010 If you roll over only the 80% you receive, you must pay tax on the 20% you did not roll over. Download irs form 1040 2010 You can replace the 20% that was withheld with other money within the 60-day period to make a 100% rollover. Download irs form 1040 2010 Voluntary deductible contributions. Download irs form 1040 2010   For tax years 1982 through 1986, employees could make deductible contributions to a 403(b) plan under the individual retirement arrangement (IRA) rules instead of deducting contributions to a traditional IRA. Download irs form 1040 2010   If you made voluntary deductible contributions to a 403(b) plan under these traditional IRA rules, the distribution of all or part of the accumulated deductible contributions may be rolled over if it otherwise qualifies as a distribution you can roll over. Download irs form 1040 2010 Accumulated deductible contributions are the deductible contributions: Plus Income allocable to the contributions, Gain allocable to the contributions, and Minus Expenses and losses allocable to the contributions, and Distributions from the contributions, income, or gain. Download irs form 1040 2010 Excess employer contributions. Download irs form 1040 2010   The portion of a distribution from a 403(b) plan transferred to a traditional IRA that was previously included in income as excess employer contributions (discussed earlier) is not an eligible rollover distribution. Download irs form 1040 2010   Its transfer does not affect the rollover treatment of the eligible portion of the transferred amounts. Download irs form 1040 2010 However, the ineligible portion is subject to the traditional IRA contribution limits and may create an excess IRA contribution subject to a 6% excise tax (see chapter 1 of Publication 590). Download irs form 1040 2010 Qualified domestic relations order. Download irs form 1040 2010   You may be able to roll over tax free all or any part of an eligible rollover distribution from a 403(b) plan that you receive under a qualified domestic relations order (QDRO). Download irs form 1040 2010 If you receive the interest in the 403(b) plan as an employee's spouse or former spouse under a QDRO, all of the rollover rules apply to you as if you were the employee. Download irs form 1040 2010 You can roll over your interest in the plan to a traditional IRA or another 403(b) plan. Download irs form 1040 2010 For more information on the treatment of an interest received under a QDRO, see Publication 575. Download irs form 1040 2010 Spouses of deceased employees. Download irs form 1040 2010   If you are the spouse of a deceased employee, you can roll over the qualifying distribution attributable to the employee. Download irs form 1040 2010 You can make the rollover to any eligible retirement plan. Download irs form 1040 2010   After you roll money and other property over from a 403(b) plan to an eligible retirement plan, and you take a distribution from that plan, you will not be eligible to receive the capital gain treatment or the special averaging treatment for the distribution. Download irs form 1040 2010 Second rollover. Download irs form 1040 2010   If you roll over a qualifying distribution to a traditional IRA, you can, if certain conditions are satisfied, later roll the distribution into another 403(b) plan. Download irs form 1040 2010 For more information, see IRA as a holding account (conduit IRA) for rollovers to other eligible plans in chapter 1 of Publication 590. Download irs form 1040 2010 Nonspouse beneficiary. Download irs form 1040 2010   A nonspouse beneficiary may make a direct rollover of a distribution from a 403(b) plan of a deceased participant if the rollover is a direct transfer to an inherited IRA established to receive the distribution. Download irs form 1040 2010 If the rollover is a direct trustee-to-trustee transfer to an IRA established to receive the distribution: The transfer will be treated as an eligible rollover distribution. Download irs form 1040 2010 The IRA will be considered an inherited account. Download irs form 1040 2010 The required minimum distribution rules that apply in instances where the participant dies before the entire interest is distributed will apply to the transferred IRA. Download irs form 1040 2010    For more information on IRAs, see Publication 590. Download irs form 1040 2010 Frozen deposits. Download irs form 1040 2010   The 60-day period usually allowed for completing a rollover is extended for any time that the amount distributed is a frozen deposit in a financial institution. Download irs form 1040 2010 The 60-day period cannot end earlier than 10 days after the deposit ceases to be a frozen deposit. Download irs form 1040 2010   A frozen deposit is any deposit that on any day during the 60-day period cannot be withdrawn because: The financial institution is bankrupt or insolvent, or The state where the institution is located has placed limits on withdrawals because one or more banks in the state are (or are about to be) bankrupt or insolvent. Download irs form 1040 2010 Gift Tax If, by choosing or not choosing an election, or option, you provide an annuity for your beneficiary at or after your death, you may have made a taxable gift equal to the value of the annuity. Download irs form 1040 2010 Joint and survivor annuity. Download irs form 1040 2010   If the gift is an interest in a joint and survivor annuity where only you and your spouse have the right to receive payments, the gift will generally be treated as qualifying for the unlimited marital deduction. Download irs form 1040 2010 More information. Download irs form 1040 2010   For information on the gift tax, see Publication 559, Survivors, Executors, and Administrators. Download irs form 1040 2010 Prev  Up  Next   Home   More Online Publications