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File Free State Tax Return

Website Can I Efile Past Year Tax ReturnsTax Form For Military2011 Tax Forms Federal1040x Tax FormFile 2012 And 2013 TaxesFree State And Federal Tax ReturnState Income Tax AddressTaxact.com 2011Amend 2008 Tax ReturnFree File 2011 TaxesUnemployment Tax FilingFree Federal And State Tax Filing OnlineIrs FormsTurbotax 2012 Amended ReturnAmending 2009 Tax ReturnFile 2009 TaxesSearch FreetaxusaTax SoftwareState TaxesIrs GovDownload A 1040ez Federal Tax Form1040 Ez Form 20112010 1040File 1040ez Online FreeH & R Block ComForm 1040x 20082011 1040 FormTax AidAarp Tax Aide LocationsPrint State Tax Form1040ez Form For 2012H & R Block 1040xIrs Efile 2011Hr Block2012 Tax FormsFree 2011 TaxWhere Do I Get State Tax FormsHr Block Free E FileWhen Can I File My 2011 TaxesEfile

File Free State Tax Return

File free state tax return Index Symbols 1099-C, Persons who each receive a Form 1099-C showing the full amount of debt. File free state tax return 501(c)(3) organizations, Section 501(c)(3) organization. File free state tax return A Abandonments, Abandonments Canceled debt, Canceled debt. File free state tax return Assistance (see Tax help) B Bankruptcy, Bankruptcy Reduction of tax attributes, Bankruptcy and Insolvency Business Real property indebtedness, Qualified Real Property Business Indebtedness C Canceled debt, Canceled Debts, Persons who each receive a Form 1099-C showing the full amount of debt. File free state tax return Exceptions Deductible debt, Deductible Debt Gifts, Gifts, Bequests, Devises, and Inheritances Price reduced after purchase, Price Reduced After Purchase Student loans, Student Loans Exclusions Bankruptcy, Bankruptcy Insolvency, Insolvency Qualified farm indebtedness, Qualified Farm Indebtedness Qualified principal residence indebtedness, Qualified Principal Residence Indebtedness Qualified real property business indebtedness, Qualified Real Property Business Indebtedness Co-owners, Persons who each receive a Form 1099-C showing the full amount of debt. File free state tax return D Debts Stockholder's, Stockholder debt Definitions Adjusted tax attributes, Adjusted tax attributes. File free state tax return Main home, Main home. File free state tax return Qualified acquisition indebtedness, Definition of qualified acquisition indebtedness. File free state tax return Qualified farm indebtedness, Qualified Farm Indebtedness Qualified principal residence indebtedness, Qualified Principal Residence Indebtedness Qualified real property business indebtedness, Qualified Real Property Business Indebtedness E Educational loans, Student Loans Exceptions Home Affordable Modification Program, Home Affordable Modification Program F Farm indebtedness, Qualified Farm Indebtedness Reduction of tax attributes, Qualified Farm Indebtedness Foreclosures, Foreclosures and Repossessions Form 1099-A, Forms 1099-A and 1099-C. File free state tax return , Forms 1099-A and 1099-C. File free state tax return 1099-C, Forms 1099-A and 1099-C. File free state tax return , Forms 1099-A and 1099-C. File free state tax return Free tax services, Free help with your tax return. File free state tax return G Gifts, Gifts, Bequests, Devises, and Inheritances H Help (see Tax help) Home Affordable Modification Program, Home Affordable Modification Program I Income from, Canceled Debts Income from canceled debt, Canceled Debts Insolvency, Insolvency Reduction of tax attributes, Bankruptcy and Insolvency L Limits Excluded farm debt, Exclusion limit. File free state tax return Excluded principal residence indebtedness, Exclusion limit. File free state tax return Qualified real property business indebtedness, Exclusion limit. File free state tax return Loans Student, Student Loans M Missing children, photographs of, Reminder Mortgage Debt Relief Act (see Qualified Principal Residence Indebtedness) P Principal residence indebtedness, Qualified Principal Residence Indebtedness Publications (see Tax help) Q Qualified farm indebtedness, Qualified Farm Indebtedness Reduction of tax attributes, Qualified Farm Indebtedness Qualified principal residence indebtedness, Qualified Principal Residence Indebtedness Reduction of tax attributes, Qualified Principal Residence Indebtedness Qualified real property business indebtedness, Qualified Real Property Business Indebtedness Reduction of tax attributes, Qualified Real Property Business Indebtedness R Real property business indebtedness, Qualified Real Property Business Indebtedness Recapture Basis reductions, Recapture of basis reductions. File free state tax return Repossessions, Foreclosures and Repossessions S Stockholder debts, Stockholder debt Student loans, Student Loans Suggestions for publication, Comments and suggestions. File free state tax return T Tax attributes, reduction of Bankruptcy, Bankruptcy and Insolvency Insolvency, Bankruptcy and Insolvency Qualified farm indebtedness, Qualified Farm Indebtedness Qualified principal residence indebtedness, Qualified Principal Residence Indebtedness Qualified real property business indebtedness, Qualified Real Property Business Indebtedness Tax help, How To Get Tax Help TTY/TDD information, How To Get Tax Help Prev  Up     Home   More Online Publications
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Identity Protection Tips

Top tips every taxpayer should know about identity theft

Identity theft often starts outside of the tax administration system when someone's personal information is stolen or lost. Identity thieves may then use a taxpayer's identity to fraudulently file a tax return and claim a refund. In other cases, the identity thief uses the taxpayer's personal information in order to get a job. The legitimate taxpayer may be unaware that anything has happened until they file their return later in the filing season and discover two returns have been filed using the same Social Security number.

These are the IRS' top tips to help you avoid becoming the victim of an identity thief.

  1. The IRS does not initiate contact with taxpayers by email or social media tools to request personal or financial information. The IRS does not send emails stating you are being electronically audited or that you are getting a refund. This includes any type of electronic communication, such as text messages and social media channels.

  2. If you receive a scam email claiming to be from the IRS, forward it to the IRS at phishing@irs.gov.

  3. Identity thieves access your personal information by many different means, including:
    • Stealing your wallet or purse
    • Posing as someone who needs information about you through a phone call or email
    • Looking through your trash for personal information
    • Accessing information you provide to an unsecured Internet site.

  4. If you discover a website that claims to be the IRS but does not begin with 'www.irs.gov', forward that link to the IRS at phishing@irs.gov.

  5. To learn how to identify a secure website, visit the Federal Trade Commission's website.

  6. If your SSN is stolen, another individual may use it to get a job. That person's employer may report income earned by them to the IRS using your SSN, thus making it appear you did not report all of your income on your tax return.

    When this occurs, you should contact the IRS to show the income is not yours. After the IRS authenticates who you are, your tax record will be updated to reflect only your information. The IRS will use this information to minimize future occurrences.

  7. Your identity may have been stolen if a letter from the IRS indicates more than one tax return was filed for you or the letter states you received wages from an employer you don't know. If you receive such a letter from the IRS, leading you to believe your identity has been stolen, respond immediately to the name, address or phone number on the IRS notice. If you believe the notice is not from the IRS, contact the IRS to determine if the letter is a legitimate IRS notice.

  8. If your tax records are not currently affected by identity theft, but you believe you may be at risk due to a lost wallet, questionable credit card activity, or credit report, you need to provide the IRS with proof of your identity. You should submit a copy of your valid government-issued identification, such as a Social Security card, driver's license or passport, along with a copy of a police report and/or a completed IRS Form 14039, Identity Theft Affidavit, which should be faxed to the IRS at 1-855-807-5720. Please be sure to write clearly.

    As an option, you can also contact the IRS Identity Protection Specialized Unit, toll-free at 1-800-908-4490. IPSU hours of Operation: Monday - Friday, 7:00 a.m. - 7:00 p.m. your local time (Alaska & Hawaii follow Pacific Time).

    You should also follow FTC's guidance for reporting identity theft

  9. Show your Social Security card to your employer when you start a job or to your financial institution for tax reporting purposes. Do not routinely carry your card or other documents that display your SSN.

  10. For more information about identity theft, including information about how to report identity theft, phishing and related fraudulent activity, visit the IRS Identity Theft Protection page, which you can find by searching identity theft on the IRS.gov home page.

  11. IRS impersonation schemes flourish during tax season and can take the form of email, websites, even tweets. Scammers may also use a phone or fax to reach their victims. If you receive a paper letter or notice via mail claiming to be the IRS but you suspect it is a scam, check the IRS phishing page at IRS.gov/phishing to determine if it is a legitimate IRS notice or letter. If it is a legitimate IRS notice or letter, reply if needed. If the caller or party that sent the paper letter is not legitimate, contact the Treasury Inspector General for Tax Administration at 1-800-366-4484. You may also fax the notice/letter you received plus any related or supporting information to TIGTA. Note: This is not a toll-free FAX number 1-202-927-7018.

  12. While preparing your tax return for electronic filing, make sure to use a strong password to protect the data file. Once your return has been e-filed, save the file to a CD or flash drive and then delete the personal return information from your hard drive. Store the CD or flash drive in a safe place, such as a lock box or safe. If working with an accountant, you should query them on what measures they take to protect your information.

  13. If you have information about the identity thief that impacted your personal information negatively, file an online complaint with the Internet Crime Complaint Center. The IC3 gives victims of cyber crime a convenient and easy-to-use reporting mechanism that alerts authorities of suspected criminal or civil violations. IC3 sends every complaint to one or more law enforcement or regulatory agencies that have jurisdiction over the matter.

 


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Page Last Reviewed or Updated: 06-Dec-2013

The File Free State Tax Return

File free state tax return Publication 908 - Main Content Table of Contents Bankruptcy Code Tax Compliance RequirementsTax Returns Due for Periods Ending Before the Bankruptcy Filing in Chapter 13 Cases Tax Returns Due After the Bankruptcy Filing Individuals in Chapter 12 or 13 Individuals in Chapter 7 or 11Debtor's Election To End Tax Year – Form 1040 Taxes and the Bankruptcy Estate Bankruptcy Estate – Income, Deductions, and Credits Tax Reporting – Chapter 11 Cases Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due Tax Return Example – Form 1041 Partnerships and CorporationsFiling Requirements Partnerships Corporations Receiverships Determination of TaxPrompt Determination Requests Court Jurisdiction Over Tax MattersBankruptcy Court Tax Court Federal Tax ClaimsUnsecured Tax Claims Discharge of Unpaid Tax Debt CancellationExclusions Reduction of Tax Attributes Partnerships Corporations Tax Attribute Reduction Example How To Get Tax HelpTaxpayer Advocacy Panel (TAP). File free state tax return Low Income Taxpayer Clinics (LITCs). File free state tax return Bankruptcy Code Tax Compliance Requirements Tax Returns Due for Periods Ending Before the Bankruptcy Filing in Chapter 13 Cases The Bankruptcy Code requires chapter 13 debtors to file all required tax returns for tax periods ending within 4 years of the debtor's bankruptcy filing. File free state tax return All such federal tax returns must be filed with the IRS before the date first set for the first meeting of creditors. File free state tax return The debtor may request the trustee to hold the meeting open for an additional 120 days to enable the debtor to file the returns (or until the day the returns are due under an automatic IRS extension, if later). File free state tax return After notice and hearing, the bankruptcy court may extend the period for another 30 days. File free state tax return Failure to timely file the returns can prevent confirmation of a chapter 13 plan and result in either dismissal of the chapter 13 case or conversion to a chapter 7 case. File free state tax return Note. File free state tax return Individual debtors should use their home address when filing Form 1040 with the IRS. File free state tax return Returns should not be filed “in care of” the trustee's address. File free state tax return Ordering tax transcripts and copies of returns. File free state tax return   Trustees may require the debtor to submit copies or transcripts of the debtor's returns as proof of filing. File free state tax return The debtor can request free transcripts of the debtor's income tax returns by filing Form 4506-T, Request for Transcript of Tax Return, with the IRS or by placing a request on the IRS's free Automated Delivery Service (ADS), available by calling 1-800-829-1040. File free state tax return If requested through ADS, the transcript will be mailed to the debtor's most current address according to the IRS's records. File free state tax return Transcripts requested using Form 4506-T may be mailed to any address, including to the attention of the trustee in the debtor's bankruptcy case. File free state tax return Transcripts are normally mailed within 10 to 15 days of receipt of the request by the IRS. File free state tax return A transcript contains most of the information on the debtor's filed return, but it is not a copy of the return. File free state tax return To request a copy of the debtor's filed return, file Form 4506, Request for Copy of Tax Return. File free state tax return It may take up to 60 days for the IRS to provide the copies after receipt of the debtor's request, and there is a fee of $57. File free state tax return 00 per tax return for copies of the returns. File free state tax return Tax Returns Due After the Bankruptcy Filing For debtors filing bankruptcy under all chapters (chapters 7, 11, 12, or 13), the Bankruptcy Code provides that if the debtor does not file a tax return that becomes due after the commencement of the bankruptcy case, or obtain an extension for filing the return before the due date, the taxing authority may request that the bankruptcy court either dismiss the case or convert the case to a case under another chapter of the Bankruptcy Code. File free state tax return If the debtor does not file the required return or obtain an extension within 90 days after the request is made, the bankruptcy court must dismiss or convert the case. File free state tax return Tax returns and payment of taxes in chapter 11 cases. File free state tax return   The Bankruptcy Code provides that a chapter 11 debtor's failure to timely file tax returns and pay taxes owed after the date of the “order for relief” (the bankruptcy petition date in voluntary cases) is cause for dismissal of the chapter 11 case, conversion to a chapter 7 case, or appointment of a chapter 11 trustee. File free state tax return Disclosure of debtor's return information to trustee. File free state tax return   In bankruptcy cases filed under chapter 7 or 11 by individuals, the debtor's income tax returns for the year the bankruptcy case begins and for earlier years are, upon written request, open to inspection by or disclosure to the trustee. File free state tax return If the bankruptcy case was not voluntary, disclosure cannot be made before the bankruptcy court has entered an order for relief, unless the court rules that the disclosure is needed for determining whether relief should be ordered. File free state tax return    In bankruptcy cases other than those of individuals filing under chapter 7 or 11, the debtor's income tax returns for the current and prior years are, upon written request, open to inspection by or disclosure to the trustee, but only if the IRS finds that the trustee has a material interest that will be affected by information on the return. File free state tax return Material interest is generally defined as a financial or monetary interest. File free state tax return Material interest is not limited to the trustee's responsibility to file a return on behalf of the bankruptcy estate. File free state tax return   However, the U. File free state tax return S. File free state tax return Trustee (an officer of the Department of Justice, responsible for maintaining and supervising a panel of private trustees for chapter 7 bankruptcy cases) and the standing chapter 13 trustee (the administrator of chapter 13 cases in a specific geographic region) generally do not have a material interest in the debtor’s return or return information. File free state tax return Disclosure of bankruptcy estate's return information to debtor. File free state tax return    The bankruptcy estate's tax return(s) are open, upon written request, to inspection by or disclosure to the individual debtor in a chapter 7 or 11 bankruptcy. File free state tax return Disclosure of the estate's return to the debtor may be necessary to enable the debtor to determine the amount and nature of the tax attributes, if any, that the debtor assumes when the bankruptcy estate terminates. File free state tax return Individuals in Chapter 12 or 13 Only individuals may file a chapter 13 bankruptcy. File free state tax return Chapter 13 relief is not available to corporations or partnerships. File free state tax return The bankruptcy estate is not treated as a separate entity for tax purposes when an individual files a petition under chapter 12 (Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income) or 13 (Adjustment of Debts of an Individual with Regular Income) of the Bankruptcy Code. File free state tax return In these cases the individual continues to file the same federal income tax returns that were filed prior to the bankruptcy petition, Form 1040, U. File free state tax return S. File free state tax return Individual Income Tax Return. File free state tax return On the debtor's individual tax return, Form 1040, report all income received during the entire year and deduct all allowable expenses. File free state tax return Do not include in income the amount from any debt canceled due to the debtor's bankruptcy. File free state tax return To the extent the debtor has any losses, credits, or basis in property that were previously reduced as a result of canceled debt, these reductions must be included on the debtor's return. File free state tax return See Debt Cancellation, later. File free state tax return Interest on trust accounts in chapter 13 cases. File free state tax return   In chapter 13 proceedings, do not include interest earned on amounts held by the trustee in trust accounts as income on the debtor's return. File free state tax return This interest is not available to either the debtor or creditors, it is available only to the trustee for use by the U. File free state tax return S. File free state tax return Trustee system. File free state tax return The interest is also not taxable to the trustee as income. File free state tax return Individuals in Chapter 7 or 11 When an individual debtor files for bankruptcy under chapter 7 or 11 of the Bankruptcy Code, the bankruptcy estate is treated as a new taxable entity, separate from the individual taxpayer. File free state tax return The bankruptcy estate in a chapter 7 case is represented by a trustee. File free state tax return The trustee is appointed to administer the estate and liquidate any nonexempt assets. File free state tax return In chapter 11 cases, the debtor often remains in control of the assets as a “debtor-in-possession” and acts as the bankruptcy trustee. File free state tax return However, the bankruptcy court, for cause, may appoint a trustee if such appointment is in the best interests of the creditors and the estate. File free state tax return During the chapter 7 or 11 bankruptcy, the debtor continues to file an individual tax return on Form 1040. File free state tax return The bankruptcy trustee files a Form 1041 for the bankruptcy estate. File free state tax return However, when a debtor in a chapter 11 bankruptcy case remains a debtor-in-possession, he or she must file both a Form 1040 individual return and a Form 1041 estate return for the bankruptcy estate (if return filing requirements are met). File free state tax return Although a husband and wife may file a joint bankruptcy petition whose bankruptcy estates are jointly administered, the estates are be treated as two separate entities for tax purposes. File free state tax return Two separate bankruptcy estate income tax returns must be filed (if each spouse separately meets the filing requirements). File free state tax return For information about determining the tax due and paying tax for a chapter 7 or 11 bankruptcy estate, see Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due, later. File free state tax return Debtor's Election To End Tax Year – Form 1040 Short tax years. File free state tax return   An individual debtor in a chapter 7 or 11 case may elect to close the debtor's tax year for the year in which the bankruptcy petition is filed, as of the day before the date on which the bankruptcy case commences. File free state tax return If the debtor makes this election, the debtor's tax year is divided into 2 short tax years of less than 12 months each. File free state tax return The first tax year ends on the day before the commencement date and the second tax year begins on the commencement date. File free state tax return   If the election is made, the debtor's federal income tax liability for the first short tax year becomes an allowable claim against the bankruptcy estate arising before the bankruptcy filing. File free state tax return Also, the tax liability for the first short tax year is not subject to discharge under the Bankruptcy Code. File free state tax return    If the debtor does not make an election to end the tax year, the commencement of the bankruptcy case does not affect the debtor's tax year. File free state tax return Also, no part of the debtor's income tax liability for the year in which the bankruptcy case commences can be collected from the bankruptcy estate. File free state tax return Note. File free state tax return The debtor cannot make a short tax year election if no assets, other than exempt property, are in the bankruptcy estate. File free state tax return Making the Election - Filing Requirements First short tax year. File free state tax return   The debtor can elect to end the debtor's tax year by filing a return on Form 1040 for the first short tax year. File free state tax return The return must be filed on or before the 15th day of the fourth full month after the end of that first tax year. File free state tax return Second short tax year. File free state tax return   If the debtor elects to end the tax year on the day before filing the bankruptcy case, the debtor must file the return for the first short tax year in the manner discussed above. File free state tax return   If the debtor makes this election, the debtor must also file a separate Form 1040 for the second short tax year by the regular due date. File free state tax return To avoid delays in processing the return, write “Second Short Year Return After Section 1398 Election” at the top of the return. File free state tax return Example. File free state tax return Jane Doe, an individual calendar year taxpayer, filed a bankruptcy petition under chapter 7 or 11 on May 8, 2012. File free state tax return If Jane elected to close her tax year at the commencement of her case, Jane's first short year for 2012 runs from January 1 through May 7, 2012. File free state tax return Jane's second short year runs from May 8, 2012, through December 31, 2012. File free state tax return To have a timely filed election for the first short year, Jane must file Form 1040 (or an extension of time to file) for the period January 1 through May 7 by September 15. File free state tax return To avoid delays in processing the return, write “Section 1398 Election” at the top of the return. File free state tax return The debtor may also make the election by attaching a statement to Form 4868, Automatic Extension of Time to File an U. File free state tax return S. File free state tax return Individual Tax Return. File free state tax return The statement must state that the debtor elects under IRC section 1398(d)(2) to close the debtor's tax year on the day before filing the bankruptcy case. File free state tax return The debtor must file Form 4868 by the due date of the return for the first short tax year. File free state tax return The debtor's spouse may also elect to close his or her tax year, see Election by debtor's spouse, below. File free state tax return Election by debtor's spouse. File free state tax return   If the debtor is married, the debtor's spouse may join in the election to end the tax year. File free state tax return If the debtor and spouse make a joint election, the debtor must file a joint return for the first short tax year. File free state tax return The debtor must elect by the due date for filing the return for the first short tax year. File free state tax return Once the election is made, it cannot be revoked for the first short tax year. File free state tax return However, the election does not prevent the debtor and the spouse from filing separate returns for the second short tax year. File free state tax return Later bankruptcy of spouse. File free state tax return    If the debtor's spouse files for bankruptcy later in the same year, he or she may also choose to end his or her tax year, regardless of whether he or she joined in the election to end the debtor's tax year. File free state tax return   As each spouse has a separate bankruptcy, one or both of them may have 3 short tax years in the same calendar year. File free state tax return If the debtor's spouse joined the debtor's election or if the debtor had not made the election to end the tax year, the debtor can join in the spouse's election. File free state tax return However, if the debtor made an election and the spouse did not join that election, the debtor cannot then join the spouse's later election. File free state tax return The debtor and the spouse are precluded from this election because they have different tax years. File free state tax return This results because the debtor does not have a tax year ending the day before the spouse's filing for bankruptcy, and the debtor cannot file a joint return for a year ending on the day before the spouse's filing of bankruptcy. File free state tax return Example 1. File free state tax return Paul and Mary Harris are calendar-year taxpayers. File free state tax return Paul's voluntary chapter 7 bankruptcy case begins on March 4. File free state tax return If Paul does not make an election, his tax year does not end on March 3. File free state tax return If he makes an election, Paul's first tax year is January 1–March 3, and his second tax year begins on March 4. File free state tax return Mary could join in Paul's election as long as they file a joint return for the tax year January 1–March 3. File free state tax return They must make the election by July 15, the due date for filing the joint return. File free state tax return Example 2. File free state tax return Fred and Ethel Barnes are calendar-year taxpayers. File free state tax return Fred's voluntary chapter 7 bankruptcy case begins on May 6, and Ethel's bankruptcy case begins on November 1 of the same year. File free state tax return Ethel could elect to end her tax year on October 31. File free state tax return If Fred did not elect to end his tax year on May 5, or if he elected to do so but Ethel had not joined in his election, Ethel would have 2 tax years in the same calendar year if she decided to close her tax year. File free state tax return Her first tax year is January 1–October 31, and her second year is November 1–December 31. File free state tax return If Fred did not end his tax year as of May 5, he could join in Ethel's election to close her tax year on October 31, but only if they file a joint return for the tax year January 1–October 31. File free state tax return If Fred elected to end his tax year on May 5, but Ethel did not join in Fred's election, Fred cannot join in Ethel's election to end her tax year on October 31. File free state tax return Fred and Ethel cannot file a joint return for that short tax year because their tax years preceding October 31 were not the same. File free state tax return Example 3. File free state tax return Jack and Karen Thomas are calendar-year taxpayers. File free state tax return Karen's voluntary chapter 7 bankruptcy case began on April 10, and Jack's voluntary chapter 7 bankruptcy case began on October 3 of the same year. File free state tax return Karen elected to close her tax year on April 9 and Jack joins in Karen's election. File free state tax return Under these facts, Jack would have 3 tax years for the same calendar year if he makes the election relating to his own bankruptcy case. File free state tax return The first tax year would be January 1–April 9; the second, April 10–October 2; and the third, October 3–December 31. File free state tax return Karen may join in Jack's election if they file a joint return for the second short tax year (April 10–October 2). File free state tax return If Karen does join in, she would have the same 3 short tax years as Jack. File free state tax return Also, if Karen joins in Jack's election, they may file a joint return for the third tax year (October 3–December 31), but they are not required to do so. File free state tax return Annualizing taxable income. File free state tax return   If the debtor elects to close the tax year, the debtor must annualize taxable income for each short tax year in the same manner a change in annual accounting period is calculated. File free state tax return See Short Tax Year in Publication 538, for information on how to annualize the debtor's income and to figure the tax for the short tax year. File free state tax return Dismissal of bankruptcy case. File free state tax return   If the bankruptcy court later dismisses an individual chapter 7 or 11 case, the bankruptcy estate is no longer treated as a separate taxable entity. File free state tax return It is as if no bankruptcy estate was created for tax purposes. File free state tax return In this situation, the debtor must file amended tax returns on Form 1040X, to replace all full or short year individual returns (Form 1040) and bankruptcy estate returns (Form 1041) filed as a result of the bankruptcy case. File free state tax return Income, deductions, and credits previously reported by the bankruptcy estate must be reported on the debtor's amended returns. File free state tax return Attach a statement to the amended returns explaining why the debtor is filing an amended return. File free state tax return Taxes and the Bankruptcy Estate Property of the bankruptcy estate. File free state tax return   At the commencement of a bankruptcy case a bankruptcy estate is created. File free state tax return Bankruptcy law determines which of the debtor's assets become part of a bankruptcy estate. File free state tax return This estate generally includes all of the debtor's legal and equitable interests in property as of the commencement date. File free state tax return However, there are exceptions and certain property is exempted or excluded from the bankruptcy estate. File free state tax return Note. File free state tax return Exempt property and abandoned property are initially part of the bankruptcy estate, but are subsequently removed from the estate. File free state tax return Excluded property is never included in the estate. File free state tax return Transfer of assets between debtor and bankruptcy estate. File free state tax return   The transfer (other than by sale or exchange) of an asset from the debtor to the bankruptcy estate is not treated as a disposition for income tax purposes. File free state tax return The transfer does not result in gain or loss, acceleration of income or deductions, or recapture of deductions or credits. File free state tax return For example, the transfer of an installment obligation to the estate would not accelerate gain under the rules for reporting installment sales. File free state tax return The estate assumes the same basis, holding period, and character of the transferred assets. File free state tax return Also, the estate generally accounts for the transferred assets in the same manner as debtor. File free state tax return   When the bankruptcy estate is terminated or dissolved, any resulting transfer (other than by sale or exchange) of the estate's assets back to the debtor is also not treated as a disposition for tax purposes. File free state tax return The transfer does not result in gain or loss, acceleration of income or deductions, or recapture of deductions or credits to the estate. File free state tax return Abandoned property. File free state tax return    The abandonment of property by the estate to the debtor is a nontaxable disposition of property. File free state tax return If the debtor received abandoned property from the bankruptcy estate, the debtor assumes the same basis in the property that the bankruptcy estate had. File free state tax return Separate taxable entity. File free state tax return   When an individual files a bankruptcy petition under chapter 7 or 11, the bankruptcy estate is treated as a separate taxable entity from the debtor. File free state tax return The court appointed trustee or the debtor-in-possession is responsible for preparing and filing all of the bankruptcy estate's tax returns, including its income tax return on Form 1041, U. File free state tax return S. File free state tax return Income Tax Return for Estates and Trusts, and paying its taxes. File free state tax return The debtor remains responsible for filing his or her own returns on Form 1040, U. File free state tax return S. File free state tax return Individual Income Tax Return, and paying taxes on income that does not belong to the estate. File free state tax return Employer identification number. File free state tax return   The trustee or debtor-in-possession must obtain an EIN for a bankruptcy estate. File free state tax return The trustee or debtor-in-possession uses this EIN on all tax returns filed for the bankruptcy estate with the IRS, including estimated tax returns. File free state tax return See Employer identification number, under Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due, later. File free state tax return    The social security number of the individual debtor cannot be used as the EIN for the bankruptcy estate. File free state tax return Income, deductions, and credits – Form 1040. File free state tax return   In an individual chapter 7 or 11 bankruptcy case, do not include the income, deductions, and credits that belong to the bankruptcy estate on the debtor's individual income tax return (Form 1040). File free state tax return Also, do not include as income on the debtor's return the amount of any debt canceled by reason of the bankruptcy discharge. File free state tax return The bankruptcy estate must reduce certain losses, credits, and the basis in property (to the extent of these items) by the amount of canceled debt. File free state tax return See Debt Cancellation, below. File free state tax return Note. File free state tax return The debtor may not be able to claim certain deductions available to the bankruptcy estate such as administrative expenses. File free state tax return Additionally, the bankruptcy exclusion cannot be used to exclude income from a cancelled debt if the discharge of indebtedness was not within the bankruptcy case, even though the debtor was under the bankruptcy court's protection at the time. File free state tax return However, other exclusions, such as the insolvency exclusion, may apply. File free state tax return Bankruptcy Estate – Income, Deductions, and Credits Bankruptcy Estate Income Income of the estate in individual chapter 7 cases. File free state tax return    The gross income of the bankruptcy estate includes gross income of the debtor to which the estate is entitled under the Bankruptcy Code. File free state tax return Gross income also includes income generated by the bankruptcy estate from property of the estate after the commencement of the case. File free state tax return   Gross income of the bankruptcy estate does not include amounts received or accrued by the debtor before the commencement of the case. File free state tax return Additionally, in chapter 7 cases, gross income of the bankruptcy estate does not include any income that the debtor earns after the date of the bankruptcy petition. File free state tax return Income of the estate in individual chapter 11 cases. File free state tax return    In chapter 11 cases, under IRC section 1398(e)(1), gross income of the bankruptcy estate includes income that the debtor earns for services performed after the bankruptcy petition date. File free state tax return Also, earnings from services performed by an individual debtor after the commencement of the chapter 11 case are property of the bankruptcy estate under section 1115 of the Bankruptcy Code (11 U. File free state tax return S. File free state tax return C. File free state tax return section 1115). File free state tax return Note. File free state tax return A debtor-in-possession may be compensated by the estate for managing or operating a trade or business that the debtor conducted before the commencement of the bankruptcy case. File free state tax return Such payments should be reported by the debtor as miscellaneous income on his or her individual income tax return (Form 1040). File free state tax return Amounts paid by the estate to the debtor-in-possession for managing or operating the trade or business may qualify as administrative expenses of the estate. File free state tax return See Administrative expenses, below. File free state tax return Conversion or dismissal of chapter 11 cases. File free state tax return   If a chapter 11 case is converted to a chapter 13 case, the chapter 13 estate is not a separate taxable entity and earnings from post-conversion services and income from property of the estate realized after the conversion to chapter 13 are taxed to the debtor. File free state tax return If the chapter 11 case is converted to a chapter 7 case, 11 U. File free state tax return S. File free state tax return C. File free state tax return section 1115 does not apply after conversion and: Earnings from post-conversion services will be taxed to the debtor, rather than the estate, and The property of the chapter 11 estate will become property of the chapter 7 estate. File free state tax return Any income on this property will be taxed to the estate even if the income is realized after the conversion to chapter 7. File free state tax return If a chapter 11 case is dismissed, the debtor is treated as if the bankruptcy case had never been filed and as if no bankruptcy estate had been created. File free state tax return Bankruptcy Estate Deductions and Credits A bankruptcy estate deducts expenses incurred in a trade, business, or activity, and uses credits in the same way the debtor would have deducted or credited them had he or she continued operations. File free state tax return Note. File free state tax return Expenses may be disallowed under other provisions of the IRC (such as the disallowance of certain capital expenditures or expenses relating to tax-exempt interest). File free state tax return Administrative expenses. File free state tax return   Allowable expenses include administrative expenses. File free state tax return    Administrative expenses can only be deducted by the estate, never by the debtor. File free state tax return   The bankruptcy estate is allowed deductions for bankruptcy administrative expenses and fees, including accounting fees, attorney fees, and court costs. File free state tax return These expenses are deductible on Form 1040, Schedule A as miscellaneous itemized deductions not subject to the 2% floor on miscellaneous itemized deductions, because they would not have been incurred if property had not been held by the bankruptcy estate. File free state tax return See IRC section 67(e). File free state tax return Administrative expenses of the bankruptcy estate attributable to conducting a trade or business for the production of estate rents or royalties are deductible in arriving at adjusted gross income on Form 1040, Schedules C, E, and F. File free state tax return Note. File free state tax return The bankruptcy estate uses Form 1041 as a transmittal for the tax return prepared using Form 1040 and its schedules. File free state tax return See Transmittal for Form 1040 under Tax Return Filing Requirements and Payment of Tax, later. File free state tax return Administrative expense loss. File free state tax return   If the administrative expenses of the bankruptcy estate are more than its gross income for a tax year, the excess amount may be carried back 3 years and forward 7 years. File free state tax return The amounts can only be carried to a tax year of the estate and never to a debtor's tax year. File free state tax return The excess amount to be carried back or forward is treated like a net operating loss (NOL) and must first be carried back to the earliest year possible. File free state tax return For a discussion of NOLs, see Publication 536. File free state tax return Attribute carryovers. File free state tax return   The bankruptcy estate may use its tax attributes the same way that the debtor would have used them. File free state tax return These items are determined as of the first day of the debtor's tax year in which the bankruptcy case begins. File free state tax return The bankruptcy estate assumes the following tax attributes from the debtor: NOL carryovers, Carryovers of excess charitable contributions, Recovery of tax benefit items, Credit carryovers, Capital loss carryovers, Basis, holding period, and character of assets, Method of accounting, Passive activity loss and credit carryovers, Unused at-risk deductions, and Other tax attributes provided in the regulations. File free state tax return   Certain tax attributes of the bankruptcy estate must be reduced by the amount of income that was previously excluded as a result of cancellation of debt during the bankruptcy proceeding. File free state tax return See Debt Cancellation, later. File free state tax return   When the bankruptcy estate is terminated (for example, when the case ends), the debtor assumes any remaining tax attributes previously taken over by the bankruptcy estate. File free state tax return The debtor also generally assumes any of the tax attributes, listed above, that arose during the administration of the bankruptcy estate. File free state tax return Note. File free state tax return The debtor does not assume the bankruptcy estate's administrative expense losses because they cannot be used by an individual taxpayer filing Form 1040. File free state tax return See Administrative expense loss, above. File free state tax return Passive and at-risk activities. File free state tax return   For bankruptcy cases beginning after November 8, 1992, passive activity carryover losses and credits and unused at-risk deductions are treated as tax attributes passing from the debtor to the bankruptcy estate, which the estate then passes back to the debtor when the bankruptcy estate terminates. File free state tax return Additionally, transfers to the debtor (other than by sale or exchange) of interests in passive or at-risk activities are treated as non-taxable exchanges. File free state tax return These transfers include the return of exempt property and abandonment of estate property to the debtor. File free state tax return Carrybacks from the debtor's activities. File free state tax return   The debtor cannot carry back any NOL or credit carryback from a tax year ending after the bankruptcy case has begun to any tax year ending before the case began. File free state tax return Carrybacks from the bankruptcy estate. File free state tax return   If the bankruptcy estate has an NOL that did not pass to the estate from the debtor under the attribute carryover rules, the estate can carry the loss back not only to its own earlier tax years but also to the debtor's tax years before the year the bankruptcy case began. File free state tax return The estate may also carry back excess credits, such as the general business credit, to the pre-bankruptcy tax years. File free state tax return Tax Reporting – Chapter 11 Cases Allocation of income and credits on information returns and required statement for returns for individual chapter 11 cases. File free state tax return    In chapter 11 cases, when an employer issues a Form W-2 reporting all of the debtor's wages, salary, or other compensation for a calendar year, and a portion of the earnings represent post-petition services includible in the estate's gross income, the Form W-2 amounts must be allocated between the estate and the debtor. File free state tax return The debtor-in-possession or trustee must allocate the income amount reported in box 1 and the income tax withheld reported in box 2 between the debtor and the estate. File free state tax return These allocations must reflect that the debtor's gross earnings from post-petition services and gross income from post-petition property are, generally, includible in the estate's gross income and not the debtor's gross income. File free state tax return The debtor and trustee may use a simple percentage method to allocate income and income tax withheld. File free state tax return The same method must be used to allocate the income and the withheld tax. File free state tax return Example. File free state tax return If 20% of the wages reported on Form W-2 for a calendar year were earned after the commencement of the case and are included in the estate's gross income, 20% of the withheld income tax reported on Form W-2 must also be claimed as a credit on the estate's income tax return. File free state tax return Likewise, 80% of wages must be reported by the debtor and 80% of the income tax withheld must be claimed as a credit on the debtor's income tax return. File free state tax return See IRC section 31(a). File free state tax return   If information returns are issued to the debtor for gross income, gross proceeds, or other reportable payments that should have been reported to the bankruptcy estate, the debtor-in-possession or trustee must allocate the improperly reported income in a reasonable manner between the debtor and the estate. File free state tax return In general, the allocation must ensure that any income and income tax withheld attributable to the post-petition period is reported on the estate's return, and any income and income tax withheld attributable to the pre-petition period is reported on the debtor's return. File free state tax return    IRS Notice 2006-83 requires the debtor to attach a statement to his or her individual income tax return (Form 1040) stating that the return is filed subject to a chapter 11 bankruptcy case. File free state tax return The statement must also: Show the allocations of income and income tax withheld, Describe the method used to allocate income and income tax withheld, and List the filing date of the bankruptcy case, the bankruptcy court in which the case is pending, the bankruptcy court case number, and the bankruptcy estate's EIN. File free state tax return Note. File free state tax return The debtor-in-possession or trustee must attach a similar statement to the bankruptcy estate's income tax return (Form 1041). File free state tax return   The model Notice 2006-83 Statement, shown above, may be used by debtors, debtors-in-possession, and trustees to satisfy the reporting requirement. File free state tax return Self-employment taxes in individual chapter 11 cases. File free state tax return   IRC section 1401 imposes a tax upon the self-employment income, that is, the net earnings from self-employment of an individual. File free state tax return Net earnings from self-employment are equal to the gross income derived by an individual from any trade or business carried on by such individual, less deductions attributable to the business. File free state tax return   Neither section 1115 of the Bankruptcy Code nor IRC section 1398 addresses the application of self-employment tax to the post-petition earnings of the individual debtor. File free state tax return Therefore, if the debtor continues to derive gross income from the performance of services as a self-employed individual after the commencement of the bankruptcy case, the debtor must continue to report the debtor's self-employment income on Schedule SE (Form 1040) of the debtor's income tax return. File free state tax return This schedule includes self-employment income earned post-petition and the attributable deductions. File free state tax return The debtor must pay any self-employment tax imposed by IRC section 1401. File free state tax return Employment taxes and employer's obligation to file Form W-2 in individual chapter 11 cases. File free state tax return   In chapter 11 cases, post-petition wages earned by a debtor are generally treated as gross income of the estate. File free state tax return However, section 1115 of the Bankruptcy Code (11 U. File free state tax return S. File free state tax return C. File free state tax return section 1115) does not affect the determination of what are deemed wages for Federal Insurance Contributions Act (FICA) tax, Federal Unemployment Tax Act (FUTA) tax, or Federal Income Tax Withholding purposes. File free state tax return See Notice 2006-83. File free state tax return   The reporting and withholding obligations of a debtor's employer also do not change. File free state tax return An employer should continue to report the wages and tax withholding on a Form W-2 issued under the debtor's name and social security number. File free state tax return Notice to persons required to file information returns (other than Form W-2, Wage and Tax Statement) in individual chapter 11 cases. File free state tax return   Within a reasonable time after the commencement of a chapter 11 bankruptcy case, the trustee or debtor-in-possession should provide notification of the bankruptcy estate's EIN to all persons (or entities) that are required to file information returns for the bankruptcy estate's gross income, gross proceeds, or other types of reportable payments. File free state tax return See IRC section 6109(a)(2). File free state tax return As these payments are the property of the estate under section 1115 of the Bankruptcy Code, the payors should report the gross income, gross proceeds, or other reportable payments on the appropriate information return using the estate's name and EIN as required under the IRC and regulations (see IRC sections 6041 through 6049). File free state tax return   The trustee or debtor-in-possession should not, however, provide the EIN to a person (or entity) filing Form W-2 reporting the debtor's wages or other compensation, as section 1115 of the Bankruptcy Code does not affect the determination of what constitutes wages for purposes of federal income tax withholding or FICA. File free state tax return See Notice 2006-83. File free state tax return An employer should continue to report all wage income and tax withholding, both pre-petition and post-petition, on a Form W-2 to the debtor under the debtor's social security number. File free state tax return   The debtor in a chapter 11 case is not required to file a new Form W-4 with an employer solely because the debtor filed a chapter 11 case and the post-petition wages are includible in the estate's income and not the debtor's income. File free state tax return However, a new Form W-4 may be necessary if the debtor is no longer entitled to claim the same number of allowances previously claimed because certain deductions or credits now belong to the estate. File free state tax return See Employment Tax Regulations section 31. File free state tax return 3402(f)(2)-1. File free state tax return Additionally, the debtor may wish to file a new Form W-4 to increase the income tax withheld from post-petition wages allocated to the estate to avoid having to make estimated tax payments for the estate. File free state tax return See IRC section 6654(a). File free state tax return Notice required in converted and dismissed cases. File free state tax return   When a chapter 11 bankruptcy case is closed, dismissed, or converted to a chapter 12 or 13 case, the bankruptcy estate ends as a separate taxable entity. File free state tax return The debtor should, within a reasonable time, send notice of such event to the persons (or entities) previously notified of the bankruptcy case. File free state tax return This helps to ensure that gross income, proceeds, and other reportable payments realized after the event are reported to the debtor under the correct TIN rather than to the estate. File free state tax return   When a chapter 11 case is converted to a chapter 7 case, the bankruptcy estate will continue to exist as a separate taxable entity. File free state tax return Gross income (other than post-conversion income from the debtor's services), gross proceeds, or other reportable payments should continue to be reported to the estate if they are property of the chapter 7 estate. File free state tax return However, income from services performed by the debtor after conversion of the case to chapter 7 is not property of the chapter 7 estate. File free state tax return After the conversion, the debtor should notify payors required to report the debtor's nonemployee compensation that compensation earned after the conversion should be reported using the debtor's name and TIN, not the estate's name and EIN. File free state tax return Employment taxes. File free state tax return   The trustee or debtor-in-possession must withhold income and social security taxes and file employment tax returns for any wages paid by the trustee or debtor, including wage claims paid as administrative expenses. File free state tax return See Publication 15, Circular E, Employer's Tax Guide, for details on employer tax responsibilities. File free state tax return   The trustee also has the duty to prepare and file Forms W-2 for wage claims paid by the trustee, regardless of whether the claims accrued before or during bankruptcy. File free state tax return For a further discussion of employment taxes, see Employment Taxes, later. File free state tax return Notice 2006-83 Statement Pending Bankruptcy Case The taxpayer, , filed a bankruptcy petition under chapter 11 of the Bankruptcy Code in the bankruptcy court for the District of . File free state tax return The bankruptcy court case number is . File free state tax return Gross income, and withheld federal income tax, reported on Form W-2, Forms 1099, Schedule K-1, and other information returns received under the taxpayer's name and social security number (or other taxpayer identification number) are allocated between the taxpayer's TIN and the bankruptcy estate's EIN as follows, using [describe allocation method]:. File free state tax return   Year Taxpayer   Estate 1. File free state tax return Form W-2, Payor: $   $     Withheld income tax shown on Form W-2 $   $   2. File free state tax return Form 1099-INT Payor: $   $     Withheld income tax (if any) shown on Form 1099-INT $   $   3. File free state tax return Form 1099-DIV Payor: $   $     Withheld income tax (if any) shown on Form 1099-DIV $   $   4. File free state tax return Form 1099-MISC Payor: $   $     Withheld income tax (if any) shown on Form 1099-MISC $   $   Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due Filing Requirements Filing threshold. File free state tax return   If the bankruptcy estate has gross income that meets or exceeds the minimum amount required for filing, the trustee or debtor-in-possession must file an income tax return on Form 1041. File free state tax return This amount is equal to the sum of the personal exemption amount plus the basic standard deduction for a married individual filing separately. File free state tax return   For 2012, the threshold filing amount for a bankruptcy estate is $9,750 (the sum of the $3,800 personal exemption plus the $5,950 standard deduction for married individuals filing separately). File free state tax return   These amounts are generally adjusted annually. File free state tax return See the present year Form 1041 Instructions at www. File free state tax return irs. File free state tax return gov/form1041 for the current dollar amounts. File free state tax return Accounting period. File free state tax return   A bankruptcy estate may have a fiscal year. File free state tax return However, this period cannot be longer than 12 months. File free state tax return Change of accounting period. File free state tax return   The bankruptcy estate may change its accounting period (tax year) once without IRS approval. File free state tax return This rule allows the bankruptcy trustee to close the estate's tax year early, before the expected termination of the bankruptcy estate. File free state tax return The trustee can then file a return for the first short tax year to get a quick determination of the estate's tax liability. File free state tax return Employer identification number. File free state tax return   The trustee or debtor-in-possession must obtain an EIN for a bankruptcy estate. File free state tax return The trustee or debtor-in-possession uses this EIN on all tax returns filed for the bankruptcy estate with the IRS, including estimated tax returns. File free state tax return    The social security number of the individual debtor cannot be used as the EIN for the bankruptcy estate. File free state tax return   Obtain an EIN for a bankruptcy estate by applying: Online by clicking on the EIN link at www. File free state tax return irs. File free state tax return gov/businesses/small. File free state tax return The EIN is issued immediately once the application information is validated. File free state tax return By telephone at 1-800-829-4933 from 7:00 a. File free state tax return m. File free state tax return to 7:00 p. File free state tax return m. File free state tax return in the trustee's or debtor-in-possession's local time zone. File free state tax return Assistance provided to callers from Alaska and Hawaii will be based on the hours of operation in the Pacific time zone, or By mailing or faxing Form SS-4, Application for Employer Identification Number. File free state tax return   If the trustee or debtor-in-possession has not received the bankruptcy estate's EIN by the time the return is due, write “Applied for” and the date you applied in the space for the EIN. File free state tax return For more details, see Pub. File free state tax return 583, Starting a Business and Keeping Records. File free state tax return   Trustees representing ten or more bankruptcy estates (other than estates that will be filing employment or excise tax returns) may request a series or block of EINs. File free state tax return Figuring tax due. File free state tax return   The bankruptcy estate figures its taxable income the same way an individual figures taxable income. File free state tax return However, the estate uses the tax rates for a married individual filing separately to calculate the tax on its taxable income. File free state tax return The estate is entitled to one personal exemption and may either itemize deductions or take the basic standard deduction for a married individual filing a separate return. File free state tax return The estate cannot take the higher standard deduction allowed for married persons filing separately who are 65 or older or blind. File free state tax return Tax rate schedule. File free state tax return The tax on income for bankruptcy estates is calculated using the tax rate schedule for Married Individuals Filing Separately not the Estates and Trusts tax rate schedule. File free state tax return When to file. File free state tax return   Calendar year bankruptcy estates must file Form 1041 by April 15th. File free state tax return Fiscal year bankruptcy estates must file on or before the 15th day of the 4th month following the close of its tax year. File free state tax return For example, an estate that has a tax year that ends on June 30th must file Form 1041 by October 15th of the tax year. File free state tax return If the due date falls on a Saturday, Sunday, or legal holiday, file on the next business day. File free state tax return Note. File free state tax return The bankruptcy estate is allowed an automatic 6-month extension of time to file the bankruptcy estate tax return upon filing the required application, Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns. File free state tax return Transmittal for Form 1040. File free state tax return   Form 1041 is used as a transmittal for Form 1040. File free state tax return If a return is required, the trustee or debtor-in-possession must complete the identification area at the top of Form 1041 and indicate the chapter under which the bankruptcy estate filed, either chapter 7 or chapter 11. File free state tax return   Prepare the bankruptcy estate's return by completing Form 1040. File free state tax return In the top margin of Form 1040, write “Attachment to Form 1041 —DO NOT DETACH. File free state tax return ” Then, attach Form 1040 to the Form 1041 transmittal. File free state tax return Enter the tax and payment amounts on lines 23 through 29 of Form 1041, then sign and date the return. File free state tax return An example of a bankruptcy estate's tax return is prepared below. File free state tax return Note. File free state tax return The filing of the bankruptcy estate's tax return does not relieve a debtor from the requirement to file his or her individual tax return on Form 1040. File free state tax return Payment of Tax Due Payment methods. File free state tax return   Payment of tax due may be made by check or money order or by credit or debit card. File free state tax return For information on how to make payments electronically by credit or debit card, go to irs. File free state tax return gov/e-pay. File free state tax return      Payments may also be made electronically using the Electronic Federal Tax Payment System (EFTPS), a free tax payment system that allows you to make payments online or by phone. File free state tax return To enroll in EFTPS, go to eftps. File free state tax return gov or call 1-800-555-4477. File free state tax return For more information see Publication 966, Electronic Federal Tax Payment System: A Guide to Getting Started. File free state tax return Payment voucher – Form 1041-V. File free state tax return   Form 1041-V accompanies payments made by check or money order for Form 1041. File free state tax return The voucher includes information about the bankruptcy estate, including the name of the bankruptcy estate, trustee, EIN, and amount due. File free state tax return Using Form 1041-V assists the IRS in processing the payment more accurately and efficiently. File free state tax return We recommend the use of Form 1041-V; however, there is no penalty if the voucher is not used. File free state tax return Estimated tax – Form 1041-ES. File free state tax return   In most cases, the trustee or debtor-in-possession must pay any required estimated tax due for the bankruptcy estate. File free state tax return See the Form 1041-ES Instructions for information on the minimum threshold amount required for filing Form 1041-ES, paying the estimated tax, and exceptions to filing. File free state tax return Employment Taxes The trustee or debtor-in-possession must withhold income and social security taxes and file employment tax returns for any wages paid by the trustee or debtor, including wage claims paid as administrative expenses. File free state tax return Until these employment taxes are deposited as required by the IRC, they should be set aside in a separate bank account to ensure that funds are available to satisfy the liability. File free state tax return If the employment taxes are not paid as required, the trustee may be held personally liable for payment of the taxes. File free state tax return   See Publication 15, (Circular E), Employer's Tax Guide, for details on employer tax responsibilities. File free state tax return Also see IRS Notice 931, Deposit Requirements for Employment Taxes, for details on the deposit rules, including the requirement that federal employment tax deposits be made by electronic funds transfer. File free state tax return The trustee also has a duty to prepare and file Forms W-2, Wage and Tax Statement, for wage claims paid by the trustee, regardless of whether the claims accrued before or during bankruptcy. File free state tax return If the debtor fails to prepare and file Forms W-2 for wages paid before bankruptcy, the trustee should instruct the employees to file a Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. File free state tax return , with their individual income tax returns. File free state tax return Tax Return Example – Form 1041 This publication is not revised annually. File free state tax return Future changes to the forms and their instructions may not be reflected in this example. File free state tax return Note. File free state tax return The following return was prepared for tax year 2011. File free state tax return In 2011, the threshold filing amount for a bankruptcy estate was $9,500 (the sum of the $3,700 personal exemption plus the $5,800 standard deduction for married individuals filing separately). File free state tax return Facts and circumstances. File free state tax return   On December 15, 2010, Thomas Smith filed a bankruptcy petition under chapter 7. File free state tax return Joan Black was appointed trustee to administer the bankruptcy estate and to distribute the assets. File free state tax return   The estate received the following assets from Mr. File free state tax return Smith: A $100,000 certificate of deposit, Commercial rental real estate with a fair market value (FMV) of $280,000, and His personal residence with an FMV of $200,000. File free state tax return   Also, the estate received a $251,500 capital loss carryover. File free state tax return   Mr. File free state tax return Smith's bankruptcy case was closed on December 31, 2011. File free state tax return During 2011, Mr. File free state tax return Smith was relieved of $70,000 of debt by the bankruptcy court. File free state tax return The estate chose a calendar year as its tax year. File free state tax return Joan, the trustee, reviews the estate's transactions and reports the taxable events on the estate's final return. File free state tax return Schedule B (Form 1040). File free state tax return    The certificate of deposit earned $5,500 of interest during 2011. File free state tax return Joan reports this interest on Schedule B. File free state tax return She completes this schedule and enters the result on Form 1040. File free state tax return Form 4562. File free state tax return   Joan enters the depreciation allowed on Form 4562. File free state tax return She completes the form and enters the result on Schedule E. File free state tax return Schedule E (Form 1040). File free state tax return   The commercial real estate was rented through the date of sale. File free state tax return Joan reports the income and expenses on Schedule E. File free state tax return She enters the net income on Form 1040. File free state tax return Form 4797. File free state tax return   The commercial real estate was sold on July 1, 2011, for $280,000. File free state tax return The property was purchased in 2001 at a cost of $250,000. File free state tax return The total depreciation allowable as of the date of sale was $120,000. File free state tax return Additionally, $25,000 of selling expenses were incurred. File free state tax return Joan reports the gain or loss from the sale on Form 4797. File free state tax return She completes the form and enters the gain on Schedule D (Form 1040). File free state tax return   Mr. File free state tax return Smith's former residence was sold on September 30, 2011. File free state tax return The sale price was $200,000, the selling expenses were $20,000, and his adjusted basis was $130,000. File free state tax return This sale is excluded from gross income under IRC section 121. File free state tax return Note. File free state tax return Gains from the sale of personal residences are excluded from gross income up to $250,000 under IRC section 121 ($500,000 for married couples filing a joint return). File free state tax return Bankruptcy estates succeed to this exclusion at the commencement of the case. File free state tax return See Regulation section 1. File free state tax return 1398-3. File free state tax return Schedule D (Form 1040). File free state tax return   Joan completes Schedule D, taking into account the $250,000 capital loss carryover from 2010 ($251,500 transferred to the estate minus $1,500 used on the estate's 2010 return). File free state tax return She enters the results on Form 1040. File free state tax return Form 1040, page 1. File free state tax return   Joan completes page 1 of the Form 1040 and enters the adjusted gross income on the first line of Form 1040, page 2. File free state tax return Schedule A (Form 1040). File free state tax return   During 2011, the estate paid mortgage interest and real property tax on Mr. File free state tax return Smith's former residence. File free state tax return It also paid income tax to the state. File free state tax return Joan enters the mortgage interest, real estate tax, and income tax on Schedule A. File free state tax return Also, she reports the bankruptcy estate's administrative expenses as a miscellaneous deduction not subject to the 2% floor on miscellaneous itemized deductions. File free state tax return She completes the Schedule A and enters the result on page 2 of Form 1040. File free state tax return Form 1040, page 2. File free state tax return   Joan determines the estate's taxable income and figures its tax using the tax rate schedule for married filing separately. File free state tax return She then enters the estate's estimated tax payments and figures the amount the estate still owes. File free state tax return Form 982. File free state tax return   Joan completes the Schedule D Tax Worksheet to figure the capital loss carryover. File free state tax return Because $70,000 of debt was canceled, Joan must reduce the tax attributes of the estate by the amount of the canceled debt. File free state tax return See Debt Cancellation, later. File free state tax return After the bankruptcy case ends, Mr. File free state tax return Smith will assume the estate's tax attributes. File free state tax return Mr. File free state tax return Smith will assume a capital loss carryover of $53,500 ($123,500 carryover minus the $70,000 attribute reduction) for use in preparation of his individual tax return (Form 1040). File free state tax return Note. File free state tax return If the bankruptcy estate had continued, the capital loss carryover would be available to the bankruptcy estate for the 2012 tax year. File free state tax return Form 1041. File free state tax return   Joan enters the total tax, estimated tax payments, and tax due from Form 1040 on Form 1041. File free state tax return She completes the identification area at the top of Form 1041, then signs and dates the return as the trustee on behalf of the bankruptcy estate. File free state tax return This image is too large to be displayed in the current screen. File free state tax return Please click the link to view the image. File free state tax return Sample Form 1040 - page 1 This image is too large to be displayed in the current screen. File free state tax return Please click the link to view the image. File free state tax return Sample Form 1040 - page 2 This image is too large to be displayed in the current screen. File free state tax return Please click the link to view the image. File free state tax return Sample Schedule A This image is too large to be displayed in the current screen. File free state tax return Please click the link to view the image. File free state tax return Sample Schedule B This image is too large to be displayed in the current screen. File free state tax return Please click the link to view the image. File free state tax return Sample Schedule D This image is too large to be displayed in the current screen. File free state tax return Please click the link to view the image. File free state tax return Sample Schedule E This image is too large to be displayed in the current screen. File free state tax return Please click the link to view the image. File free state tax return Sample Form 4797 - page 1 This image is too large to be displayed in the current screen. File free state tax return Please click the link to view the image. File free state tax return Sample Form 2119 This image is too large to be displayed in the current screen. File free state tax return Please click the link to view the image. File free state tax return Sample Form 4797 - page 2 This image is too large to be displayed in the current screen. File free state tax return Please click the link to view the image. File free state tax return Sample Form 4562 This image is too large to be displayed in the current screen. File free state tax return Please click the link to view the image. File free state tax return Sample Capital Loss Carryover Worksheet This image is too large to be displayed in the current screen. File free state tax return Please click the link to view the image. File free state tax return Sample Form 982 Capital Loss Carryover Worksheet—Lines 6 and 14 Use this worksheet to figure your capital loss carryovers from 2010 to 2011 if your 2010 Schedule D, line 21, is a loss and (a) that loss is a smaller loss than the loss on your 2010 Schedule D, line 16, or (b) the amount on your 2010 Form 1040, line 41 (or your 2010 Form 1040NR, line 38, if applicable) is less than zero. File free state tax return Otherwise, you do not have any carryovers. File free state tax return 1. File free state tax return Enter the amount from your 2010 Form 1040, line 41, or Form 1040NR, line 38. File free state tax return If a loss, enclose the amount in parentheses 1. File free state tax return 19,880   2. File free state tax return Enter the loss from your 2010 Schedule D, line 21, as a positive amount 2. File free state tax return 1,500   3. File free state tax return Combine lines 1 and 2. File free state tax return If zero or less, enter -0- 3. File free state tax return 21,380   4. File free state tax return Enter the smaller of line 2 or line 3 4. File free state tax return 1,500     If line 7 of your 2010 Schedule D is a loss, go to line 5; otherwise, enter -0- on line 5 and go to line 9. File free state tax return       5. File free state tax return Enter the loss from your 2010 Schedule D, line 7, as a positive amount 5. File free state tax return 0   6. File free state tax return Enter any gain from your 2010 Schedule D, line 15. File free state tax return If a loss, enter -0- 6. File free state tax return         7. File free state tax return Add lines 4 and 6 7. File free state tax return 1,500   8. File free state tax return Short-term capital loss carryover for 2011. File free state tax return Subtract line 7 from line 5. File free state tax return If zero or less, enter -0-. File free state tax return If more than zero, also enter this amount on Schedule D, line 6 8. File free state tax return 0     If line 15 of your 2010 Schedule D is a loss, go to line 9; otherwise, skip lines 9 through 13. File free state tax return       9. File free state tax return Enter the loss from your 2010 Schedule D, line 15, as a positive amount 9. File free state tax return 251,500   10. File free state tax return Enter any gain from your 2010 Schedule D, line 7. File free state tax return If a loss, enter -0- 10. File free state tax return 0       11. File free state tax return Subtract line 5 from line 4. File free state tax return If zero or less, enter -0- 11. File free state tax return 1,500       12. File free state tax return Add lines 10 and 11 12. File free state tax return 1,500   13. File free state tax return Long-term capital loss carryover for 2011. File free state tax return Subtract line 12 from line 9. File free state tax return If zero or less, enter -0-. File free state tax return If more than zero, also enter this amount on Schedule D, line 14 13. File free state tax return 250,000                       Partnerships and Corporations Filing Requirements A separate taxable estate is not created when a partnership or corporation files a bankruptcy petition and their tax return filing requirements do not change. File free state tax return The debtor-in-possession, court appointed trustee, assignee, or receiver must file the entity's income tax returns on Form 1065, Form 1120 or, Form 1120S. File free state tax return In cases where a trustee or receiver is not appointed, the debtor-in-possession continues business operations and remains in possession of the business' property during the bankruptcy proceeding. File free state tax return The debtor-in-possession, rather than the general partner of a partnership or corporate officer of a corporation, assumes the fiduciary responsibility to file the business' tax returns. File free state tax return Partnerships The filing requirements for a partnership in a bankruptcy proceeding do not change. File free state tax return However, the responsibility to file the required returns becomes that of the court appointed trustee, receiver, or debtor-in-possession. File free state tax return A partnership's debt that is canceled as a result of the bankruptcy proceeding is not included in the partnership's income. File free state tax return However, It may or may not be included in the individual partners' income. File free state tax return See Partnerships, below under Debt Cancellation. File free state tax return Corporations The filing requirements for a corporation in a bankruptcy proceeding also do not change. File free state tax return A bankruptcy trustee, receiver, or debtor-in-possession, having possession of or holding title to substantially all of the property or business operations of the debtor corporation, must file the debtor's corporate income tax return for the tax year. File free state tax return The following discussion only highlights bankruptcy tax rules applying to corporations. File free state tax return The complex details of corporate bankruptcy reorganizations are beyond the scope of this publication. File free state tax return Therefore, you may wish to seek the help of a professional tax advisor. File free state tax return See Corporations under Debt Cancellation for information about a corporation's debt canceled in a bankruptcy proceeding. File free state tax return Tax-Free Reorganizations The tax-free reorganization provisions of the Internal Revenue Code allow a corporation to transfer all or part of its assets to another corporation in a bankruptcy under title 11 of the United States Code or in a similar case. File free state tax return However, under the reorganization plan, the stock or securities of the corporation to which the assets are transferred must be distributed in a transaction that qualifies under IRC section 354, 355, or 356. File free state tax return A “similar case” includes a receivership, foreclosure, or other similar proceeding in a federal or state court. File free state tax return In these cases, any party to the reorganization must be under the jurisdiction of the court and the transfer of assets under the plan of reorganization must be approved by the court. File free state tax return In a receivership, foreclosure, or similar proceeding before a federal or state agency involving certain financial institutions, the agency is treated as a court. File free state tax return Generally, IRC section 354 provides that no gain or loss is recognized if a corporation's stock is exchanged solely for stock or securities in a corporation that is a party to the reorganization under a qualifying reorganization plan. File free state tax return In this case, shareholders in the bankrupt corporation would recognize no gain or loss if they exchange their stock solely for stock or securities of the corporation acquiring the bankrupt corporation's assets. File free state tax return IRC section 355 generally provides that no gain or loss is recognized by a shareholder if a corporation distributes solely stock or securities of another corporation that the distributing corporation controls immediately before the distribution. File free state tax return IRC section 356 allows tax-free exchanges in situations that would qualify under IRC section 354 or 355, except that other property or money, in addition to the permitted stock or securities, is received by the shareholder. File free state tax return In this situation, gain is recognized by the shareholder, but only to the extent of the money and the FMV of the other property received. File free state tax return No loss is recognized in this situation. File free state tax return Exemption from tax return filing A trustee, receiver, or assignee of a corporation in bankruptcy, receivership, or in the process of dissolving, may apply to the IRS for relief from filing federal income tax returns for the corporation. File free state tax return To qualify, the corporation must have ceased business operations and have no assets nor income for the tax year. File free state tax return The exemption request must be submitted to the local IRS Insolvency Office handling the case. File free state tax return The request to the IRS must include the name, address, and EIN of the corporation and a statement of the facts (with any supporting documents) showing why the debtor needs relief from the filing requirements. File free state tax return The request must also include the following statement: “I hereby request relief from filing federal income tax returns for tax years ending _____ for the above-named corporation and declare under penalties of perjury that to the best of my knowledge and belief the information contained herein is correct. File free state tax return ” The statement must be signed by the trustee, receiver or assignee. File free state tax return The statement must also include notice of appointment to act on behalf of the corporation (this is not required for bankruptcy trustees or debtors-in-possession). File free state tax return The IRS will act on your request within 90 days. File free state tax return Disclosure of return information to trustee. File free state tax return   Upon written request, current and earlier returns of the debtor are open to inspection by or disclosure to the trustee or receiver. File free state tax return However, in bankruptcy cases other than those of individuals filing under chapter 7 or 11, such as a corporate bankruptcy, the IRS must find that the trustee has a material interest that will be affected by information on the return. File free state tax return Material interest is generally defined as a financial or monetary interest. File free state tax return Material interest is not limited to the trustee's responsibility to file a return on behalf of the bankruptcy estate. File free state tax return Receiverships Court-established receiverships sometimes arise in connection with bankruptcies. File free state tax return Certain court-established receiverships should be treated as qualified settlement funds ("QSFs") for purposes of IRC section 468B and the underlying Treasury Regulations. File free state tax return QSFs are required to file an annual income tax return, Form 1120-SF, U. File free state tax return S. File free state tax return Income Tax Return for Settlement Funds. File free state tax return More information about QSFs may be found in Treasury Regulation sections 1. File free state tax return 468B-1 through -5. File free state tax return Determination of Tax The determination of the proper amount of tax due for a tax year begins with the bankruptcy estate's filing of Form 1041, and the individual debtor's filing of Form 1040, or for bankrupt entities filing Forms 1065, 1120, or 1120S. File free state tax return After a return is filed, the IRS will either accept the return as filed or select the return for examination. File free state tax return Under examination the IRS may redetermine the tax liability shown on the return. File free state tax return If the bankruptcy estate or debtor disagrees with the redetermined tax due, the tax as redetermined by the IRS may be contested in the bankruptcy court, or Tax Court, as applicable. File free state tax return See Court Jurisdiction over Tax Matters, later. File free state tax return Prompt Determination Requests Pursuant to Rev. File free state tax return Proc. File free state tax return 2006-24, 2006-22 I. File free state tax return R. File free state tax return B. File free state tax return 943, www. File free state tax return irs. File free state tax return gov/irb/2006-22_IRB/ar12, as modified by Announcement 2011-77, www. File free state tax return irs. File free state tax return gov/irb/2011-51_IRB/ar13, the bankruptcy trustee may request a determination of any unpaid tax liability incurred by the bankruptcy estate during the administration of the case, by filing a tax return and a request for such determination with the IRS. File free state tax return Unless the return is fraudulent or contains a material misrepresentation, the estate, trustee, debtor, and any successor to the debtor are discharged from liability upon payment of the tax: As determined by the IRS, As determined by the bankruptcy court, after completion of the IRS examination, or As shown on the return, if the IRS does not: Notify the trustee within 60 days after the request for determination that the return has been selected for examination, or Complete the examination and notify the trustee of any tax due within 180 days after the request (or any additional time permitted by the bankruptcy court). File free state tax return Making the request for determination. File free state tax return   As detailed in Rev. File free state tax return Proc. File free state tax return 2006-24, as modified by Announcement 2011-77, to request a prompt determination of any unpaid tax liability of the estate, the trustee must file a signed written request, in duplicate, with the Internal Revenue Service, Centralized Insolvency Operation, P. File free state tax return O. File free state tax return Box 7346, Philadelphia, PA 19101–7346 (marked “Request for Prompt Determination”). File free state tax return   The request must be submitted in duplicate and must be executed under penalties of perjury. File free state tax return In addition, the trustee must submit along with the request an exact copy of the return(s) filed by the trustee with the IRS for each completed tax period. File free state tax return The request must contain the following information: A statement indicating that it is a Request for Prompt Determination of Tax Liability, specifying the type of return and tax period for each return being filed. File free state tax return The name and location of the office where the return was filed. File free state tax return The name of the debtor. File free state tax return Debtor's social security number, TIN, or EIN. File free state tax return Type of bankruptcy estate. File free state tax return Bankruptcy case number. File free state tax return Court where the bankruptcy case is pending. File free state tax return   The copy of the return(s) submitted with the request must be an exact copy of a valid return. File free state tax return A request for prompt determination will be considered incomplete and returned to the trustee if it is filed with a copy of a document that does not qualify as a valid return. File free state tax return    To qualify as valid, a return must meet certain criteria, including a signature under penalties of perjury. File free state tax return A document filed by the trustee with the jurat stricken, deleted, or modified will not qualify as a valid return. File free state tax return Examination of return. File free state tax return   The IRS will notify the trustee within 60 days from receipt of the request whether the return filed by the trustee has been selected for examination or has been accepted as filed. File free state tax return If the return is selected for examination, it will be examined as soon as possible. File free state tax return The IRS will notify the trustee of any tax due within 180 days from receipt of the application or within any additional time permitted by the bankruptcy court. File free state tax return   If a prompt determination request is incomplete, all the documents received by the IRS will be returned to the trustee by the assigned Field Insolvency Office with an explanation identifying the missing item(s) and instructions to re-file the request once corrected. File free state tax return   Once corrected, the request must be filed with the IRS at the Field Insolvency Office address specified in the correspondence accompanying the returned incomplete request. File free state tax return   In the case of an incomplete request submitted with a copy of an invalid return document, the trustee must file a valid original return with the appropriate IRS office and submit a copy of that return with the corrected request when the request is re-filed. File free state tax return Note. File free state tax return An incomplete request includes those submitted with a copy of a return form, the original of which does not qualify as a valid return. File free state tax return   The 60-day period to notify the trustee whether the return is accepted as filed or has been selected for examination does not begin to run until a complete request package is recei