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Free 2010 Turbotax

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Free 2010 Turbotax

Free 2010 turbotax 3. Free 2010 turbotax   Filing Information for Individuals in Certain U. Free 2010 turbotax S. Free 2010 turbotax Possessions Table of Contents American SamoaWhere To Get Forms and Information Which Returns To File Special Rules for American Samoa Double Taxation The Commonwealth of Puerto RicoWhere To Get Forms and Information Which Returns To File Special Rules for Puerto Rico Double Taxation The Commonwealth of the Northern Mariana IslandsWhere To Get Forms and Information Which Return To File Special Rules for the CNMI Double Taxation GuamWhere To Get Forms and Information Which Return To File Special Rules for Guam Double Taxation The U. Free 2010 turbotax S. Free 2010 turbotax Virgin IslandsWhere To Get Forms and Information Which Return To File Special Rules for the USVI Double Taxation If you have income from American Samoa, the CNMI, Guam, Puerto Rico, or the USVI, you may have to file a tax return with the tax department of that possession. Free 2010 turbotax Or, you may have to file two annual tax returns, one with the possession's tax department and the other with the U. Free 2010 turbotax S. Free 2010 turbotax Internal Revenue Service. Free 2010 turbotax This chapter covers the general rules for filing returns in the five possessions. Free 2010 turbotax You must first determine if you are a bona fide resident of the relevant possession. Free 2010 turbotax See chapter 1 for a discussion of the requirements you must meet. Free 2010 turbotax You should ask for forms and advice about the filing of possession tax returns from that possession's tax department, not the Internal Revenue Service. Free 2010 turbotax Contact information is listed in this chapter under the heading for each possession. Free 2010 turbotax American Samoa American Samoa has its own separate and independent tax system. Free 2010 turbotax Although its tax laws are modeled on the U. Free 2010 turbotax S. Free 2010 turbotax Internal Revenue Code, there are certain differences. Free 2010 turbotax Where To Get Forms and Information Requests for advice about matters connected with Samoan taxation should be sent to: American Samoa Government Tax Office  Executive Office Building First Floor Pago Pago, AS 96799 The phone number is (684) 633-4181. Free 2010 turbotax The fax number is (684) 633-1513. Free 2010 turbotax You can get forms and publications at www. Free 2010 turbotax americansamoa. Free 2010 turbotax gov. Free 2010 turbotax The addresses and phone numbers listed above are subject to change. Free 2010 turbotax Which Returns To File Your residency status and your source of income with regard to American Samoa determine whether you file your return and pay your tax to American Samoa, to the United States, or to both. Free 2010 turbotax In addition to the information below that is categorized by residency status, the Special Rules for American Samoa section (later) contains important information for determining the correct forms to file. Free 2010 turbotax Bona Fide Resident of American Samoa Bona fide residents of American Samoa are generally exempt from U. Free 2010 turbotax S. Free 2010 turbotax tax on their American Samoa source income. Free 2010 turbotax U. Free 2010 turbotax S. Free 2010 turbotax citizen or resident alien. Free 2010 turbotax   If you are a U. Free 2010 turbotax S. Free 2010 turbotax citizen or resident alien and a bona fide resident of American Samoa during the entire tax year, you generally must file the following returns. Free 2010 turbotax An American Samoa tax return reporting your gross income from worldwide sources. Free 2010 turbotax If you report non-American Samoa source income on your American Samoa tax return, you can claim a credit against your American Samoa tax liability for income taxes paid on that income to the United States, a foreign country, or another possession. Free 2010 turbotax A U. Free 2010 turbotax S. Free 2010 turbotax tax return reporting income from worldwide sources, but excluding income from sources within American Samoa. Free 2010 turbotax However, amounts received for services performed as an employee of the United States or any of its agencies cannot be excluded (see U. Free 2010 turbotax S. Free 2010 turbotax Government employees under Special Rules for American Samoa, later). Free 2010 turbotax To exclude American Samoa source income, attach a completed Form 4563 to your U. Free 2010 turbotax S. Free 2010 turbotax tax return (see Form 4563 for more information). Free 2010 turbotax If you are excluding American Samoa source income on your U. Free 2010 turbotax S. Free 2010 turbotax tax return, you will not be allowed any deductions from gross income or credits against tax that are directly or indirectly allocable to the exempt income. Free 2010 turbotax For more information, see Special Rules for Completing Your U. Free 2010 turbotax S. Free 2010 turbotax Tax Return in chapter 4. Free 2010 turbotax Nonresident alien. Free 2010 turbotax   If you are a bona fide resident of American Samoa during the entire tax year, but a nonresident alien of the United States, you generally must file the following returns. Free 2010 turbotax An American Samoa tax return reporting worldwide income. Free 2010 turbotax A U. Free 2010 turbotax S. Free 2010 turbotax tax return (Form 1040, U. Free 2010 turbotax S. Free 2010 turbotax Individual Income Tax Return) reporting income from worldwide sources, but excluding American Samoa source income other than amounts for services performed as an employee of the United States or any of its agencies. Free 2010 turbotax For more information, see U. Free 2010 turbotax S. Free 2010 turbotax Government employees under Special Rules for American Samoa, later. Free 2010 turbotax To exclude income from sources within American Samoa, attach a completed Form 4563 to your U. Free 2010 turbotax S. Free 2010 turbotax tax return (see Form 4563 , below, for more information). Free 2010 turbotax For all other tax purposes, however, you will be treated as a nonresident alien individual. Free 2010 turbotax For example, you are not allowed the standard deduction, you cannot file a joint return, and you are not allowed a deduction for a dependent unless that person is a citizen or national of the United States. Free 2010 turbotax There are also limitations on what deductions and credits are allowed. Free 2010 turbotax See Publication 519 for more information. Free 2010 turbotax Form 4563. Free 2010 turbotax   If you must file a U. Free 2010 turbotax S. Free 2010 turbotax income tax return and you qualify to exclude any of your income from American Samoa, claim the exclusion by completing Form 4563 and attaching it to your Form 1040. Free 2010 turbotax Form 4563 cannot be filed by itself. Free 2010 turbotax There is an example of a filled-in Form 4563 in chapter 5. Free 2010 turbotax   If you are a bona fide resident of American Samoa during the entire tax year and you are not including a check or a money order, send your U. Free 2010 turbotax S. Free 2010 turbotax tax return and all attachments (including Form 4563) to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. Free 2010 turbotax S. Free 2010 turbotax tax return and all attachments (including Form 4563) to: Internal Revenue Service P. Free 2010 turbotax O. Free 2010 turbotax Box 1303 Charlotte, NC 28201-1303 USA   Send your American Samoa tax return and all attachments to the address given under Where To Get Forms and Information , earlier. Free 2010 turbotax Self-employment tax. Free 2010 turbotax   If you are not required to file a U. Free 2010 turbotax S. Free 2010 turbotax tax return but have income that is effectively connected with a trade or business in American Samoa, you must file Form 1040-SS with the United States. Free 2010 turbotax On this form you will report your self-employment income to the United States and, if necessary, pay self-employment tax on that income. Free 2010 turbotax Additional Medicare Tax. Free 2010 turbotax   Beginning in 2013, you may be required to pay Additional Medicare Tax. Free 2010 turbotax Also, you may need to report Additional Medicare Tax withheld by your employer. Free 2010 turbotax For more information see Additional Medicare Tax under Special Rules for Completing Your U. Free 2010 turbotax S. Free 2010 turbotax Tax Return in chapter 4. Free 2010 turbotax Net Investment Income Tax. Free 2010 turbotax   Beginning in 2013, the Net Investment Income Tax (NIIT) is 3. Free 2010 turbotax 8 percent of the lesser of an individual’s net investment income or the excess of the individual’s modified adjusted gross income over a specified threshold amount. Free 2010 turbotax The NIIT will apply to a bona fide resident of American Samoa if a taxpayer has modified adjusted gross income from sources outside of American Samoa that exceeds a specified threshold amount, e. Free 2010 turbotax g. Free 2010 turbotax , $200,000 for single filers. Free 2010 turbotax The NIIT does not apply to any individual who is a nonresident alien with respect to the United States. Free 2010 turbotax See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information on the NIIT. Free 2010 turbotax Estimated tax payments. Free 2010 turbotax   To see if you are required to make payments of estimated income tax, self-employment tax, Additional Medicare Tax, and/or Net Investment Income Tax to the IRS, get Form 1040-ES, Estimated Tax for Individuals. Free 2010 turbotax   To pay by check or money order, send your payment with the Form 1040-ES payment voucher to: Internal Revenue Service P. Free 2010 turbotax O. Free 2010 turbotax Box 1300 Charlotte, NC 28201-1300 USA   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. Free 2010 turbotax irs. Free 2010 turbotax gov/e-pay. Free 2010 turbotax   For information on making estimated income tax payments to American Samoa, see Where To Get Forms and Information , earlier. Free 2010 turbotax Not a Bona Fide Resident of American Samoa An individual who is not a bona fide resident of American Samoa for the tax year generally files both U. Free 2010 turbotax S. Free 2010 turbotax and American Samoa tax returns, and claims a foreign tax credit on the U. Free 2010 turbotax S. Free 2010 turbotax return for taxes paid to American Samoa. Free 2010 turbotax U. Free 2010 turbotax S. Free 2010 turbotax citizen or resident alien. Free 2010 turbotax   If you are a U. Free 2010 turbotax S. Free 2010 turbotax citizen or resident alien but not a bona fide resident of American Samoa during the entire tax year, you generally must file the following returns. Free 2010 turbotax An American Samoa tax return reporting only your income from sources within American Samoa. Free 2010 turbotax Wages for services performed in American Samoa, whether for a private employer, the U. Free 2010 turbotax S. Free 2010 turbotax Government, or otherwise, is income from sources within American Samoa. Free 2010 turbotax A U. Free 2010 turbotax S. Free 2010 turbotax tax return reporting your income from worldwide sources. Free 2010 turbotax You can take a credit against your U. Free 2010 turbotax S. Free 2010 turbotax tax liability if you paid income taxes to American Samoa (or other possession or foreign country) and reported income from those sources on your U. Free 2010 turbotax S. Free 2010 turbotax tax return. Free 2010 turbotax De minimis exception to determining source of income. Free 2010 turbotax   In certain situations you will not have income from a possession. Free 2010 turbotax See De minimis exception under Compensation for Labor or Personal Services in chapter 2. Free 2010 turbotax Nonresident alien. Free 2010 turbotax   If you are a nonresident alien of the United States who does not qualify as a bona fide resident of American Samoa for the entire tax year, you generally must file the following returns. Free 2010 turbotax An American Samoa tax return reporting only your income from sources within American Samoa. Free 2010 turbotax In this situation, wages for services performed in American Samoa, whether for a private employer, the U. Free 2010 turbotax S. Free 2010 turbotax Government, or otherwise, is income from sources within American Samoa. Free 2010 turbotax A U. Free 2010 turbotax S. Free 2010 turbotax tax return (Form 1040NR, U. Free 2010 turbotax S. Free 2010 turbotax Nonresident Alien Income Tax Return) reporting U. Free 2010 turbotax S. Free 2010 turbotax source income according to the rules for a nonresident alien. Free 2010 turbotax See the Instructions for Form 1040NR. Free 2010 turbotax   If you are not a bona fide resident of American Samoa during the entire tax year, and you are not including a check or a money order, send your U. Free 2010 turbotax S. Free 2010 turbotax tax return and all attachments to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. Free 2010 turbotax S. Free 2010 turbotax tax return and all attachments to: Internal Revenue Service P. Free 2010 turbotax O. Free 2010 turbotax Box 1303 Charlotte, NC 28201-1303 USA   Send your American Samoa tax return and all attachments to the address given under Where To Get Forms and Information , earlier. Free 2010 turbotax Special Rules for American Samoa Some special rules apply to certain types of income and employment connected with American Samoa. Free 2010 turbotax U. Free 2010 turbotax S. Free 2010 turbotax Armed Forces. Free 2010 turbotax   Bona fide residents of American Samoa include military personnel whose official home of record is American Samoa. Free 2010 turbotax Civilian spouse of active duty member of the U. Free 2010 turbotax S. Free 2010 turbotax Armed Forces. Free 2010 turbotax   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. Free 2010 turbotax S. Free 2010 turbotax Armed Forces ), your tax residence is American Samoa, follow the guidance in the section for bona fide residents under Which Returns To File, earlier. Free 2010 turbotax However, if your tax residence is one of the 50 states or the District of Columbia and your only income from American Samoa is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. Free 2010 turbotax S. Free 2010 turbotax tax return (Form 1040) and a state and/or local tax return, if required. Free 2010 turbotax If you have income from American Samoa other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1), contact the local tax administration for guidance. Free 2010 turbotax U. Free 2010 turbotax S. Free 2010 turbotax Government employees. Free 2010 turbotax   If you are employed in American Samoa by the U. Free 2010 turbotax S. Free 2010 turbotax Government or any of its agencies, you are subject to tax by American Samoa on your pay from the government. Free 2010 turbotax Whether you are subject to tax by American Samoa on your non-American Samoa source income depends on your status in American Samoa as a bona fide resident. Free 2010 turbotax   Wages and salaries paid to employees of the U. Free 2010 turbotax S. Free 2010 turbotax Government and its agencies are also subject to U. Free 2010 turbotax S. Free 2010 turbotax federal income tax. Free 2010 turbotax These payments do not qualify for the exclusion of income from sources within American Samoa, discussed earlier. Free 2010 turbotax   For tax years ending after April 9, 2008, wages and salaries paid to bona fide residents by the Government of American Samoa can be excluded on the U. Free 2010 turbotax S. Free 2010 turbotax tax return. Free 2010 turbotax   If you report government wages on both your U. Free 2010 turbotax S. Free 2010 turbotax and American Samoa tax returns, you can take a credit on your U. Free 2010 turbotax S. Free 2010 turbotax tax return for income taxes paid or accrued to American Samoa. Free 2010 turbotax Figure the credit on Form 1116, and attach that form to your U. Free 2010 turbotax S. Free 2010 turbotax tax return, Form 1040. Free 2010 turbotax Show your wages paid for services performed in American Samoa on Form 1116, line 1a, enter “American Samoa” on line g, and check box b above Part I. Free 2010 turbotax Moving expense deduction. Free 2010 turbotax   Generally, expenses of a move to American Samoa are directly attributable to American Samoa wages, salaries, and other earned income. Free 2010 turbotax Likewise, the expenses of a move back to the United States are generally attributable to U. Free 2010 turbotax S. Free 2010 turbotax earned income. Free 2010 turbotax   If your move was to American Samoa, report your deduction for moving expenses as follows. Free 2010 turbotax If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your American Samoa tax return. Free 2010 turbotax If you are not a bona fide resident, enter your deductible expenses on both your American Samoa and U. Free 2010 turbotax S. Free 2010 turbotax tax returns. Free 2010 turbotax Also, for purposes of a tax credit against your U. Free 2010 turbotax S. Free 2010 turbotax tax liability, reduce your American Samoa “general category income” on Form 1116, line 1a, by entering the deductible moving expenses on line 2. Free 2010 turbotax   If your move was to the United States, complete Form 3903, Moving Expenses, and enter the deductible amount on Form 1040, line 26. Free 2010 turbotax Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and American Samoa. Free 2010 turbotax See Double Taxation in chapter 4. Free 2010 turbotax The Commonwealth of Puerto Rico The Commonwealth of Puerto Rico has its own separate and independent tax system. Free 2010 turbotax Although it is modeled after the U. Free 2010 turbotax S. Free 2010 turbotax system, there are differences in law and tax rates. Free 2010 turbotax Where To Get Forms and Information Requests for information about the filing of Puerto Rico tax returns should be addressed to: Departamento de Hacienda Negociado de Asistencia Contributiva  P. Free 2010 turbotax O. Free 2010 turbotax Box 9024140 San Juan, Puerto Rico 00902-4140 The phone numbers are (787) 721-8051 and (787) 721-7198. Free 2010 turbotax    To obtain Puerto Rico tax forms, contact the Forms and Publications Division Office at the above address or call (787) 722-0216, option #7. Free 2010 turbotax You can access the Hacienda website at www. Free 2010 turbotax hacienda. Free 2010 turbotax gobierno. Free 2010 turbotax pr or email your questions about Puerto Rico taxes to InfoServ@hacienda. Free 2010 turbotax gobierno. Free 2010 turbotax pr. Free 2010 turbotax The addresses and phone numbers listed above are subject to change. Free 2010 turbotax Which Returns To File Generally, you will file returns with both Puerto Rico and the United States. Free 2010 turbotax The income reported on each return depends on your residency status in Puerto Rico. Free 2010 turbotax To determine if you are a bona fide resident of Puerto Rico, see the information in chapter 1. Free 2010 turbotax Bona Fide Resident of Puerto Rico Bona fide residents of Puerto Rico will generally pay tax to Puerto Rico on their worldwide income. Free 2010 turbotax U. Free 2010 turbotax S. Free 2010 turbotax citizen or resident alien. Free 2010 turbotax   If you are a U. Free 2010 turbotax S. Free 2010 turbotax citizen or resident alien and also a bona fide resident of Puerto Rico during the entire tax year, you generally must file the following returns. Free 2010 turbotax A Puerto Rico tax return reporting income from worldwide sources. Free 2010 turbotax If you report U. Free 2010 turbotax S. Free 2010 turbotax source income on your Puerto Rico tax return, you can claim a credit against your Puerto Rico tax, up to the amount allowable, for income taxes paid to the United States. Free 2010 turbotax A U. Free 2010 turbotax S. Free 2010 turbotax tax return reporting income from worldwide sources, but excluding Puerto Rico source income. Free 2010 turbotax However, see U. Free 2010 turbotax S. Free 2010 turbotax Government employees under Special Rules for Puerto Rico, later, for an exception. Free 2010 turbotax If you are excluding Puerto Rico income on your U. Free 2010 turbotax S. Free 2010 turbotax tax return, you will not be allowed any deductions or credits that are directly or indirectly allocable to exempt income. Free 2010 turbotax For more information, see Special Rules for Completing Your U. Free 2010 turbotax S. Free 2010 turbotax Tax Return in chapter 4. Free 2010 turbotax If all of your income is from Puerto Rico sources, you are not required to file a U. Free 2010 turbotax S. Free 2010 turbotax tax return. Free 2010 turbotax However, if you have self-employment income, see Self-employment tax , later. Free 2010 turbotax U. Free 2010 turbotax S. Free 2010 turbotax citizen only. Free 2010 turbotax   If you are a U. Free 2010 turbotax S. Free 2010 turbotax citizen, you may also qualify under these rules if you have been a bona fide resident of Puerto Rico for at least 2 years before moving from Puerto Rico. Free 2010 turbotax In this case, you can exclude your income derived from sources within Puerto Rico (but not wages and salaries received as an employee of the U. Free 2010 turbotax S. Free 2010 turbotax Government or its agencies) that you earned before the date you changed your residence. Free 2010 turbotax For more information, see Puerto Rico under Year of Moving From a Possession in chapter 1. Free 2010 turbotax Nonresident alien. Free 2010 turbotax   If you are a bona fide resident of Puerto Rico during the entire tax year, but a nonresident alien of the United States, you generally must file the following returns. Free 2010 turbotax A Puerto Rico tax return reporting income from worldwide sources. Free 2010 turbotax If you report U. Free 2010 turbotax S. Free 2010 turbotax source income on your Puerto Rico tax return, you can claim a credit against your Puerto Rico tax, up to the amount allowable, for income taxes paid to the United States. Free 2010 turbotax A U. Free 2010 turbotax S. Free 2010 turbotax tax return (Form 1040) reporting income from worldwide sources, but excluding Puerto Rico source income (other than amounts for services performed as an employee of the United States or any of its agencies). Free 2010 turbotax For tax purposes other than reporting income, however, you will be treated as a nonresident alien individual. Free 2010 turbotax For example, you are not allowed the standard deduction, you cannot file a joint return, and you are not allowed a deduction for a dependent unless that person is a citizen or national of the United States. Free 2010 turbotax There are also limitations on what deductions and credits are allowed. Free 2010 turbotax See Publication 519 for more information. Free 2010 turbotax Self-employment tax. Free 2010 turbotax   If you have no U. Free 2010 turbotax S. Free 2010 turbotax filing requirement but have income that is effectively connected with a trade or business in Puerto Rico, you must file Form 1040-SS or Form 1040-PR with the United States to report your self-employment income and, if necessary, pay self-employment tax. Free 2010 turbotax Additional Medicare Tax. Free 2010 turbotax   Beginning in 2013, you may be required to pay Additional Medicare Tax. Free 2010 turbotax Also, you may need to report Additional Medicare Tax withheld by your employer. Free 2010 turbotax For more information see Additional Medicare Tax under Special Rules for Completing Your U. Free 2010 turbotax S. Free 2010 turbotax Tax Return in chapter 4. Free 2010 turbotax Net Investment Income Tax. Free 2010 turbotax   Beginning in 2013, the Net Investment Income Tax (NIIT) is 3. Free 2010 turbotax 8 percent of the lesser of an individual’s net investment income or the excess of the individual’s modified adjusted gross income over a specified threshold amount. Free 2010 turbotax The NIIT will apply to a bona fide resident of Puerto Rico if a taxpayer has modified adjusted gross income from sources outside of Puerto Rico that exceeds a specified threshold amount, e. Free 2010 turbotax g. Free 2010 turbotax , $200,000 for single filers. Free 2010 turbotax The NIIT does not apply to any individual who is a nonresident alien with respect to the United States. Free 2010 turbotax See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information on the NIIT. Free 2010 turbotax Estimated tax payments. Free 2010 turbotax   To see if you are required to make payments of estimated income tax, self-employment tax, Additional Medicare Tax, and/or Net Investment Income Tax to the IRS, get Form 1040-ES (or Form 1040-ES(PR)). Free 2010 turbotax   To pay by check or money order, send your payment with the Form 1040-ES (or Form 1040-ES(PR)) payment voucher to: Internal Revenue Service P. Free 2010 turbotax O. Free 2010 turbotax Box 1300 Charlotte, NC 28201-1300 USA   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. Free 2010 turbotax irs. Free 2010 turbotax gov/e-pay. Free 2010 turbotax   For information on making estimated income tax payments to Hacienda, see Where To Get Forms and Information , earlier. Free 2010 turbotax Not a Bona Fide Resident of Puerto Rico An individual who is not a bona fide resident of Puerto Rico for the tax year generally files tax returns with both Puerto Rico and the United States. Free 2010 turbotax U. Free 2010 turbotax S. Free 2010 turbotax citizen or resident alien. Free 2010 turbotax   If you are a U. Free 2010 turbotax S. Free 2010 turbotax citizen or resident alien but not a bona fide resident of Puerto Rico during the entire tax year, you generally must file the following returns. Free 2010 turbotax A Puerto Rico tax return reporting only your income from Puerto Rico sources. Free 2010 turbotax Wages for services performed in Puerto Rico, whether for a private employer, the U. Free 2010 turbotax S. Free 2010 turbotax Government, or otherwise, is income from Puerto Rico sources. Free 2010 turbotax A U. Free 2010 turbotax S. Free 2010 turbotax tax return reporting income from worldwide sources. Free 2010 turbotax Generally, you can claim a foreign tax credit for income taxes paid to Puerto Rico on the Puerto Rico income that is not exempt from U. Free 2010 turbotax S. Free 2010 turbotax taxes (see chapter 4 for more information). Free 2010 turbotax Nonresident alien. Free 2010 turbotax   If you are a nonresident alien of the United States who does not qualify as a bona fide resident of Puerto Rico for the entire tax year, you generally must file the following returns. Free 2010 turbotax A Puerto Rico tax return reporting only your income from Puerto Rico sources. Free 2010 turbotax Wages for services performed in Puerto Rico, whether for a private employer, the U. Free 2010 turbotax S. Free 2010 turbotax Government, or otherwise, is income from Puerto Rico sources. Free 2010 turbotax A U. Free 2010 turbotax S. Free 2010 turbotax tax return (Form 1040NR) according to the rules for a nonresident alien. Free 2010 turbotax See the Instructions for Form 1040NR. Free 2010 turbotax De minimis exception to determining source of income. Free 2010 turbotax   In certain situations you will not have income from a possession. Free 2010 turbotax See De minimis exception under Compensation for Labor or Personal Services in chapter 2. Free 2010 turbotax Use the addresses listed below to file your U. Free 2010 turbotax S. Free 2010 turbotax and Puerto Rico income tax returns. Free 2010 turbotax If you are not including a check or a money order, send your U. Free 2010 turbotax S. Free 2010 turbotax tax return and all attachments to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA If you are including a check or a money order, send your U. Free 2010 turbotax S. Free 2010 turbotax tax return and all attachments to: Internal Revenue Service P. Free 2010 turbotax O. Free 2010 turbotax Box 1303 Charlotte, NC 28201-1303 USA If you request a refund on your Puerto Rico return, send your Puerto Rico tax return and all attachments to: Departamento de Hacienda P. Free 2010 turbotax O. Free 2010 turbotax Box 50072 San Juan, PR 00902-6272 Send all other Puerto Rico tax returns, with all attachments, to: Departamento de Hacienda P. Free 2010 turbotax O. Free 2010 turbotax Box 9022501 San Juan, PR 00902-2501 Special Rules for Puerto Rico In addition to the general rules given earlier for filing U. Free 2010 turbotax S. Free 2010 turbotax and Puerto Rico tax returns, there are some special rules that apply to certain individuals and types of income. Free 2010 turbotax U. Free 2010 turbotax S. Free 2010 turbotax Government employees. Free 2010 turbotax   Wages and cost-of-living allowances paid by the U. Free 2010 turbotax S. Free 2010 turbotax Government (or one of its agencies) for working in Puerto Rico are subject to Puerto Rico tax. Free 2010 turbotax However, the cost-of-living allowances are excluded from Puerto Rico gross income up to the amount exempt from U. Free 2010 turbotax S. Free 2010 turbotax tax. Free 2010 turbotax In order to claim this exclusion, you must: Include with your Puerto Rico tax return evidence to show the amount received during the year, and Be in full compliance with your Puerto Rico tax responsibilities. Free 2010 turbotax   These wages are also subject to U. Free 2010 turbotax S. Free 2010 turbotax tax, but the cost-of-living allowances are excludable. Free 2010 turbotax A foreign tax credit is available in order to avoid double taxation. Free 2010 turbotax U. Free 2010 turbotax S. Free 2010 turbotax Armed Forces. Free 2010 turbotax   Bona fide residents of Puerto Rico include military personnel whose official home of record is Puerto Rico. Free 2010 turbotax Civilian spouse of active duty member of the U. Free 2010 turbotax S. Free 2010 turbotax Armed Forces. Free 2010 turbotax   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. Free 2010 turbotax S. Free 2010 turbotax Armed Forces ), your tax residence is Puerto Rico, follow the guidance in the section for bona fide residents under Which Returns To File, earlier. Free 2010 turbotax However, if your tax residence is one of the 50 states or the District of Columbia and your only income from Puerto Rico is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. Free 2010 turbotax S. Free 2010 turbotax tax return (Form 1040) and a state and/or local tax return, if required. Free 2010 turbotax If you have income from Puerto Rico other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1 ), contact the Hacienda for guidance. Free 2010 turbotax Income from sources outside Puerto Rico and the United States. Free 2010 turbotax   If you are a U. Free 2010 turbotax S. Free 2010 turbotax citizen and bona fide resident of Puerto Rico and you have income from sources outside both Puerto Rico and the United States, that income is treated as foreign source income under both tax systems. Free 2010 turbotax In addition to your Puerto Rico and U. Free 2010 turbotax S. Free 2010 turbotax tax returns, you may also have to file a return with the country or possession from which your outside income was derived. Free 2010 turbotax To avoid double taxation, a foreign tax credit is generally available for either the U. Free 2010 turbotax S. Free 2010 turbotax or Puerto Rico return. Free 2010 turbotax Example. Free 2010 turbotax Thomas Red is a bona fide resident of Puerto Rico and a U. Free 2010 turbotax S. Free 2010 turbotax citizen. Free 2010 turbotax He traveled to the Dominican Republic and worked in the construction industry for 1 month. Free 2010 turbotax His wages were $20,000. Free 2010 turbotax Because the wages were earned outside Puerto Rico and outside the United States, Thomas must file a tax return with Puerto Rico and the United States. Free 2010 turbotax He may also have to file a tax return with the Dominican Republic. Free 2010 turbotax Moving expense deduction. Free 2010 turbotax   Generally, expenses of a move to Puerto Rico are directly attributable to wages, salaries, and other earned income from Puerto Rico. Free 2010 turbotax Likewise, the expenses of a move back to the United States are generally attributable to U. Free 2010 turbotax S. Free 2010 turbotax earned income. Free 2010 turbotax   If your move was to Puerto Rico, report your deduction for moving expenses as follows. Free 2010 turbotax If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your Puerto Rico tax return. Free 2010 turbotax If you are not a bona fide resident, enter your deductible expenses on both your Puerto Rico and U. Free 2010 turbotax S. Free 2010 turbotax tax returns. Free 2010 turbotax Also, for purposes of a tax credit against your U. Free 2010 turbotax S. Free 2010 turbotax tax liability, reduce your Puerto Rico “general category income” on Form 1116, line 1a, by entering the deductible moving expenses on line 2. Free 2010 turbotax   If your move was to the United States, complete Form 3903 and enter the deductible amount on Form 1040, line 26. Free 2010 turbotax Additional child tax credit. Free 2010 turbotax   If you are not required to file a U. Free 2010 turbotax S. Free 2010 turbotax income tax return, this credit is available only if you meet all three of the following conditions. Free 2010 turbotax You were a bona fide resident of Puerto Rico during the entire tax year. Free 2010 turbotax Social security and Medicare taxes were withheld from your wages or you paid self-employment tax. Free 2010 turbotax You had three or more qualifying children. Free 2010 turbotax (For the definition of a qualifying child, see the instructions for Form 1040-PR or Form 1040-SS. Free 2010 turbotax ) If your income exceeds certain levels, you may be disqualified from receiving this credit. Free 2010 turbotax Use Form 1040-PR or Form 1040-SS to claim the additional child tax credit. Free 2010 turbotax Advice about possible tax benefits under the Puerto Rico investment incentive programs is available from the Puerto Rico tax authorities. Free 2010 turbotax Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and the Commonwealth of Puerto Rico. Free 2010 turbotax See Double Taxation in chapter 4. Free 2010 turbotax The Commonwealth of the Northern Mariana Islands The Commonwealth of the Northern Mariana Islands (CNMI) has its own tax system based partly on the same tax laws and tax rates that apply to the United States and partly on local taxes imposed by the CNMI government. Free 2010 turbotax Where To Get Forms and Information Requests for advice about CNMI residency and tax matters should be addressed to: Commonwealth of the Northern Mariana Islands  Division of Revenue and Taxation P. Free 2010 turbotax O. Free 2010 turbotax Box 5234 CHRB Dandan Commercial Center First Floor Rm #8  Saipan, MP 96950 You can order forms and publications by calling (670) 664-1000. Free 2010 turbotax You can order forms and publications through the fax at (670) 664-1015. Free 2010 turbotax You can get forms and publications at www. Free 2010 turbotax cnmidof. Free 2010 turbotax net. Free 2010 turbotax The addresses and phone numbers listed above are subject to change. Free 2010 turbotax Which Return To File In general, all individuals with income from the CNMI will file only one return, either to the CNMI or to the United States. Free 2010 turbotax Your residency status with regard to the CNMI determines which return you will file. Free 2010 turbotax Be sure to check the Special Rules for the CNMI , later, for additional information about filing your tax return. Free 2010 turbotax Bona Fide Resident of the CNMI If you are a U. Free 2010 turbotax S. Free 2010 turbotax citizen, resident alien, or nonresident alien and a bona fide resident of the CNMI during the entire tax year, file your income tax return with the CNMI. Free 2010 turbotax Include income from worldwide sources on your CNMI return. Free 2010 turbotax In determining your total tax payments, include all income tax withheld by either the CNMI or the United States, any credit for an overpayment of income tax to either the CNMI or the United States, and any payments of estimated tax to either the CNMI or the United States. Free 2010 turbotax Pay any balance of tax due with your tax return. Free 2010 turbotax Generally, if you properly file your return with, and fully pay your income tax to, the CNMI, then you are not liable for filing an income tax return with, or for paying tax to, the United States for the tax year. Free 2010 turbotax However, if you were self-employed in 2013, see Self-employment tax , later. Free 2010 turbotax Example. Free 2010 turbotax David Gold was a bona fide resident of the CNMI for 2013. Free 2010 turbotax He received wages of $30,000 paid by a private employer in the CNMI and dividends of $4,000 from U. Free 2010 turbotax S. Free 2010 turbotax corporations that carry on business mainly in the United States. Free 2010 turbotax He must file a 2013 income tax return with the CNMI Division of Revenue and Taxation. Free 2010 turbotax He reports his total income of $34,000 on the CNMI return. Free 2010 turbotax   If you are a bona fide resident of the CNMI for the entire tax year, send your return and all attachments to the Division of Revenue and Taxation at the address given earlier. Free 2010 turbotax U. Free 2010 turbotax S. Free 2010 turbotax Citizen or Resident Alien (Other Than a Bona Fide Resident of the CNMI) If you have income from sources within the CNMI and are a U. Free 2010 turbotax S. Free 2010 turbotax citizen or resident alien, but you are not a bona fide resident of the CNMI during the entire tax year, file your income tax return with the United States. Free 2010 turbotax Include income from worldwide sources on your U. Free 2010 turbotax S. Free 2010 turbotax return. Free 2010 turbotax In determining your total tax payments, include all income tax withheld by either the United States or the CNMI, any credit for an overpayment of income tax to either the United States or the CNMI, and any payments of estimated tax to either the United States or the CNMI. Free 2010 turbotax Pay any balance of tax due with your tax return. Free 2010 turbotax Note. Free 2010 turbotax You may also need to complete Form 5074. Free 2010 turbotax You are not liable for filing an income tax return with, or for paying tax to, the CNMI for the tax year. Free 2010 turbotax Form 5074. Free 2010 turbotax   If you file a U. Free 2010 turbotax S. Free 2010 turbotax income tax return, attach a completed Form 5074 if you (and your spouse if filing a joint return) have: Adjusted gross income of $50,000 or more for the tax year, and Gross income of $5,000 or more from sources within the CNMI. Free 2010 turbotax   The United States and the CNMI use this form to divide your income taxes. Free 2010 turbotax   There is an example of a filled-in Form 5074 in chapter 5. Free 2010 turbotax De minimis exception to determining source of income. Free 2010 turbotax   In certain situations you will not have income from a possession. Free 2010 turbotax See De minimis exception under Compensation for Labor or Personal Services in chapter 2. Free 2010 turbotax Citizen or resident alien of the United States but not a bona fide resident of the CNMI. Free 2010 turbotax   If you are a citizen or resident alien of the United States but not a bona fide resident of the CNMI during the entire tax year and you are not including a check or a money order, send your return and all attachments to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. Free 2010 turbotax S. Free 2010 turbotax tax return and all attachments to: Internal Revenue Service P. Free 2010 turbotax O. Free 2010 turbotax Box 1303 Charlotte, NC 28201-1303 USA Nonresident Alien (Other Than a Bona Fide Resident of the CNMI) If you are a nonresident alien of the United States who does not qualify as a bona fide resident of the CNMI for the entire tax year, you generally must file the following returns. Free 2010 turbotax A CNMI tax return reporting only your income from sources within the CNMI. Free 2010 turbotax In this situation, wages for services performed in the CNMI, whether for a private employer, the U. Free 2010 turbotax S. Free 2010 turbotax Government, or otherwise, is income from sources within the CNMI. Free 2010 turbotax A U. Free 2010 turbotax S. Free 2010 turbotax tax return (Form 1040NR) reporting U. Free 2010 turbotax S. Free 2010 turbotax source income according to the rules for a nonresident alien. Free 2010 turbotax See the instructions for Form 1040NR. Free 2010 turbotax If you are not a bona fide resident of the CNMI during the entire tax year and you are not including a check or a money order, send your U. Free 2010 turbotax S. Free 2010 turbotax tax return and all attachments to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA If you are including a check or a money order, send your U. Free 2010 turbotax S. Free 2010 turbotax tax return and all attachments to:  Internal Revenue Service P. Free 2010 turbotax O. Free 2010 turbotax Box 1303 Charlotte, NC 28201-1303 USA Send your CNMI tax return and all attachments to:  Department of Finance Division of Revenue and Taxation Commonwealth of the Northern Mariana Islands P. Free 2010 turbotax O. Free 2010 turbotax Box 5234 CHRB Saipan, MP 96950 Citizen of the CNMI If you are a citizen of the CNMI (meaning that you were born or naturalized in the CNMI) but not otherwise a U. Free 2010 turbotax S. Free 2010 turbotax citizen or a U. Free 2010 turbotax S. Free 2010 turbotax resident alien during the tax year, file your income tax return with the CNMI. Free 2010 turbotax Include income from worldwide sources on your CNMI return. Free 2010 turbotax Take into account tax withheld by both jurisdictions in determining if there is tax overdue or an overpayment. Free 2010 turbotax Pay any balance of tax due with your tax return. Free 2010 turbotax Send your return and all attachments to:   Department of Finance Division of Revenue and Taxation Commonwealth of the Northern Mariana Islands P. Free 2010 turbotax O. Free 2010 turbotax Box 5234 CHRB Saipan, MP 96950 Special Rules for the CNMI Special rules apply to certain types of income, employment, and filing status. Free 2010 turbotax Joint return. Free 2010 turbotax   If you file a joint return, file your return (and pay the tax) with the jurisdiction where the spouse who has the greater adjusted gross income (AGI) would have to file if you were filing separately. Free 2010 turbotax If the spouse with the greater AGI is a bona fide resident of the CNMI during the entire tax year, file the joint return with the CNMI. Free 2010 turbotax If the spouse with the greater AGI is a U. Free 2010 turbotax S. Free 2010 turbotax citizen or resident alien but not a bona fide resident of the CNMI during the entire tax year, file your joint return with the United States. Free 2010 turbotax For this purpose, income is determined without regard to community property laws. Free 2010 turbotax Example. Free 2010 turbotax Marsha Blue, a U. Free 2010 turbotax S. Free 2010 turbotax citizen, was a resident of the United States, and her spouse, a citizen of the CNMI, was a bona fide resident of the CNMI during the entire tax year. Free 2010 turbotax Marsha earned $65,000 as a computer programmer in the United States. Free 2010 turbotax Her spouse earned $20,000 as an artist in the CNMI. Free 2010 turbotax Marsha and her spouse will file a joint return. Free 2010 turbotax Because Marsha has the greater AGI, she and her spouse must file their return with the United States and report the entire $85,000 on that return. Free 2010 turbotax U. Free 2010 turbotax S. Free 2010 turbotax Armed Forces. Free 2010 turbotax   If you are a member of the U. Free 2010 turbotax S. Free 2010 turbotax Armed Forces who qualified as a bona fide resident of the CNMI in a prior tax year, your absence from the CNMI solely in compliance with military orders will not change your bona fide residency. Free 2010 turbotax If you did not qualify as a bona fide resident of the CNMI in a prior tax year, your presence in the CNMI solely in compliance with military orders will not qualify you as a bona fide resident of the CNMI. Free 2010 turbotax Civilian spouse of active duty member of the U. Free 2010 turbotax S. Free 2010 turbotax Armed Forces. Free 2010 turbotax   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. Free 2010 turbotax S. Free 2010 turbotax Armed Forces ), your tax residence is the CNMI, follow the guidance in the section for bona fide residents under Which Return To File, earlier. Free 2010 turbotax However, if your tax residence is one of the 50 states or the District of Columbia and your only income from the CNMI is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. Free 2010 turbotax S. Free 2010 turbotax tax return (Form 1040) and a state and/or local tax return, if required. Free 2010 turbotax If you have income from the CNMI other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1), you may need to file Form 5074 with your U. Free 2010 turbotax S. Free 2010 turbotax tax return. Free 2010 turbotax Moving expense deduction. Free 2010 turbotax   Generally, expenses of a move to the CNMI are directly attributable to wages, salaries, and other earned income from the CNMI. Free 2010 turbotax Likewise, the expenses of a move back to the United States are generally attributable to U. Free 2010 turbotax S. Free 2010 turbotax earned income. Free 2010 turbotax   If your move was to the CNMI, report your deduction for moving expenses as follows. Free 2010 turbotax If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your CNMI tax return. Free 2010 turbotax If you are not a bona fide resident, enter your deductible expenses on Form 3903 and enter the deductible amount on Form 1040, line 26, and on Form 5074, line 20. Free 2010 turbotax   If your move was to the United States, complete Form 3903 and enter the deductible amount on Form 1040, line 26. Free 2010 turbotax Foreign tax credit. Free 2010 turbotax   Under the filing rules explained earlier, individuals with CNMI source income normally will not claim a foreign tax credit on a U. Free 2010 turbotax S. Free 2010 turbotax income tax return for tax paid to the CNMI. Free 2010 turbotax Self-employment tax. Free 2010 turbotax   If you have no U. Free 2010 turbotax S. Free 2010 turbotax filing requirement, but have income that is effectively connected with a trade or business in the CNMI, you must file Form 1040-SS with the United States to report your self-employment income and, if necessary, pay self-employment tax. Free 2010 turbotax Additional Medicare Tax. Free 2010 turbotax   Beginning in 2013, you may be required to pay Additional Medicare Tax. Free 2010 turbotax Also, you may need to report Additional Medicare Tax withheld by your employer. Free 2010 turbotax For more information see Additional Medicare Tax under Special Rules for Completing Your U. Free 2010 turbotax S. Free 2010 turbotax Tax Return in chapter 4. Free 2010 turbotax Estimated tax payments. Free 2010 turbotax   To see if you are required to make payments of estimated income tax, self-employment tax, and/or Additional Medicare Tax to the IRS, get Form 1040-ES. Free 2010 turbotax Payment of estimated tax. Free 2010 turbotax   If you must pay estimated tax, make your payment to the jurisdiction where you would file your income tax return if your tax year were to end on the date your first estimated tax payment is due. Free 2010 turbotax Generally, you should make the rest of your quarterly payments of estimated tax to the jurisdiction where you made your first payment of estimated tax. Free 2010 turbotax However, estimated tax payments to either jurisdiction will be treated as payments to the jurisdiction with which you file the tax return. Free 2010 turbotax   If you make a joint payment of estimated tax, make your payment to the jurisdiction where the spouse who has the greater estimated AGI would have to pay (if a separate payment were made). Free 2010 turbotax For this purpose, income is determined without regard to community property laws. Free 2010 turbotax Early payment. Free 2010 turbotax   If you make your first payment of estimated tax early, follow the rules given earlier to determine where to send it. Free 2010 turbotax If you send it to the wrong jurisdiction, make all later payments to the jurisdiction to which the first payment should have been sent. Free 2010 turbotax   To pay by check or money order, send your payment with the Form 1040-ES payment voucher to:  Internal Revenue Service P. Free 2010 turbotax O. Free 2010 turbotax Box 1300 Charlotte, NC 28201-1300 USA   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. Free 2010 turbotax irs. Free 2010 turbotax gov/e-pay. Free 2010 turbotax   For information on making estimated income tax payments to the CNMI, see Where To Get Forms and Information , earlier. Free 2010 turbotax Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and the CNMI. Free 2010 turbotax See Double Taxation in chapter 4. Free 2010 turbotax Guam Guam has its own tax system based on the same tax laws and tax rates that apply in the United States. Free 2010 turbotax Where To Get Forms and Information Requests for advice about Guam residency and tax matters should be addressed to: Department of Revenue and Taxation Government of Guam P. Free 2010 turbotax O. Free 2010 turbotax Box 23607 GMF, GU 96921 You can order forms and publications by calling (671) 635-1840 or (671) 635-1841. Free 2010 turbotax You can order forms and publications through the fax at (671) 633-2643. Free 2010 turbotax You can get forms and publications at www. Free 2010 turbotax guamtax. Free 2010 turbotax com. Free 2010 turbotax The addresses and phone numbers listed above are subject to change. Free 2010 turbotax Which Return To File Bona fide residents of Guam are subject to special U. Free 2010 turbotax S. Free 2010 turbotax tax rules. Free 2010 turbotax In general, all individuals with income from Guam will file only one return—either to Guam or the United States. Free 2010 turbotax Bona Fide Resident of Guam If you are a bona fide resident of Guam during the entire tax year, file your return with Guam. Free 2010 turbotax This applies to all bona fide residents who are citizens, resident aliens, or nonresident aliens of the United States. Free 2010 turbotax Include income from worldwide sources on your Guam return. Free 2010 turbotax In determining your total tax payments, include all income tax withheld by either Guam or the United States, any credit for an overpayment of income tax to either Guam or the United States, and any payments of estimated tax to either Guam or the United States. Free 2010 turbotax Pay any balance of tax due with your tax return. Free 2010 turbotax Generally, if you properly file your return with, and fully pay your income tax to, Guam, then you are not liable for filing an income tax return with, or for paying tax to, the United States. Free 2010 turbotax However, if you were self-employed in 2013, see Self-employment tax , later. Free 2010 turbotax Example. Free 2010 turbotax Gary Barker was a bona fide resident of Guam for 2013. Free 2010 turbotax He received wages of $25,000 paid by a private employer in Guam and dividends of $2,000 from U. Free 2010 turbotax S. Free 2010 turbotax corporations that carry on business mainly in the United States. Free 2010 turbotax He must file a 2013 income tax return with the Government of Guam. Free 2010 turbotax He reports his total income of $27,000 on the Guam return. Free 2010 turbotax If you are a bona fide resident of Guam for the entire tax year, send your return and all attachments to:  Department of Revenue and Taxation Government of Guam P. Free 2010 turbotax O. Free 2010 turbotax Box 23607 GMF, GU 96921 U. Free 2010 turbotax S. Free 2010 turbotax Citizen or Resident Alien (Other Than a Bona Fide Resident of Guam) If you have income from sources within Guam and are a U. Free 2010 turbotax S. Free 2010 turbotax citizen or resident alien, but you are not a bona fide resident of Guam during the entire tax year, file your income tax return with the United States. Free 2010 turbotax Include income from worldwide sources on your U. Free 2010 turbotax S. Free 2010 turbotax return. Free 2010 turbotax In determining your total tax payments, include all income tax withheld by either the United States or Guam, any credit for an overpayment of income tax to either the United States or Guam, and any payments of estimated tax to either the United States or Guam. Free 2010 turbotax Pay any balance of tax due with your tax return. Free 2010 turbotax You may also need to complete Form 5074. Free 2010 turbotax You are not liable for filing an income tax return with, or for paying tax to, Guam for the tax year. Free 2010 turbotax Form 5074. Free 2010 turbotax   If you file a U. Free 2010 turbotax S. Free 2010 turbotax income tax return, attach a completed Form 5074 if you (and your spouse if filing a joint return) have: Adjusted gross income of $50,000 or more for the tax year, and Gross income of $5,000 or more from sources within Guam. Free 2010 turbotax   The United States and Guam use this form to divide your income taxes. Free 2010 turbotax   See the Illustrated Example of Form 5074 in chapter 5. Free 2010 turbotax De minimis exception to determining source of income. Free 2010 turbotax   In certain situations you will not have income from a possession. Free 2010 turbotax See De minimis exception under Compensation for Labor or Personal Services in chapter 2. Free 2010 turbotax   If you are a citizen or resident alien of the United States but not a bona fide resident of Guam during the entire tax year and you are not including a check or money order, send your U. Free 2010 turbotax S. Free 2010 turbotax tax return and all attachments (including Form 5074) to:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. Free 2010 turbotax S. Free 2010 turbotax tax return and all attachments (including Form 5074) to:  Internal Revenue Service P. Free 2010 turbotax O. Free 2010 turbotax Box 1303 Charlotte, NC 28201-1303 USA Nonresident Alien (Other Than a Bona Fide Resident of Guam) If you are a nonresident alien of the United States who does not qualify as a bona fide resident of Guam for the entire tax year, you generally must file the following returns. Free 2010 turbotax A Guam tax return reporting only your income from sources within Guam. Free 2010 turbotax In this situation, wages for services performed in Guam, whether for a private employer, the U. Free 2010 turbotax S. Free 2010 turbotax Government, or otherwise, is income from sources within Guam. Free 2010 turbotax A U. Free 2010 turbotax S. Free 2010 turbotax tax return (Form 1040NR) reporting U. Free 2010 turbotax S. Free 2010 turbotax source income according to the rules for a nonresident alien. Free 2010 turbotax See the instructions for Form 1040NR. Free 2010 turbotax If you are not a bona fide resident of Guam during the entire tax year and you are not including a check or money order, send your U. Free 2010 turbotax S. Free 2010 turbotax tax return and all attachments to:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA If you are including a check or a money order, send your U. Free 2010 turbotax S. Free 2010 turbotax tax return and all attachments to:  Internal Revenue Service P. Free 2010 turbotax O. Free 2010 turbotax Box 1303 Charlotte, NC 28201-1303 USA Send your Guam tax return and all attachments to:   Department of Revenue and Taxation P. Free 2010 turbotax O. Free 2010 turbotax Box 23607 GMF, GU 96921 Citizen of Guam If you are a citizen of Guam (meaning that you were born or naturalized in Guam) but not otherwise a U. Free 2010 turbotax S. Free 2010 turbotax citizen or a U. Free 2010 turbotax S. Free 2010 turbotax resident alien during the tax year, file your income tax return with Guam. Free 2010 turbotax Include income from worldwide sources on your Guam return. Free 2010 turbotax Take into account tax withheld by both jurisdictions in determining if there is tax overdue or an overpayment. Free 2010 turbotax Pay any balance of tax due with your tax return. Free 2010 turbotax If you are a citizen of Guam, send your return and all attachments to:  Department of Revenue and Taxation Government of Guam P. Free 2010 turbotax O. Free 2010 turbotax Box 23607 GMF, GU 96921 Special Rules for Guam Special rules apply to certain types of income, employment, and filing status. Free 2010 turbotax Joint return. Free 2010 turbotax   If you file a joint return, you should file your return (and pay the tax) with the jurisdiction where the spouse who has the greater adjusted gross income (AGI) would have to file if you were filing separately. Free 2010 turbotax If the spouse with the greater AGI is a bona fide resident of Guam during the entire tax year, file the joint return with Guam. Free 2010 turbotax If the spouse with the greater AGI is a U. Free 2010 turbotax S. Free 2010 turbotax citizen or resident alien but not a bona fide resident of Guam during the entire tax year, file the joint return with the United States. Free 2010 turbotax For this purpose, income is determined without regard to community property laws. Free 2010 turbotax Example. Free 2010 turbotax Bill Whiting, a U. Free 2010 turbotax S. Free 2010 turbotax citizen, was a resident of the United States, and his spouse, a citizen of Guam, was a bona fide resident of Guam during the entire tax year. Free 2010 turbotax Bill earned $45,000 as an engineer in the United States. Free 2010 turbotax His spouse earned $15,000 as a teacher in Guam. Free 2010 turbotax Bill and his spouse will file a joint return. Free 2010 turbotax Because Bill has the greater AGI, he and his spouse must file their return with the United States and report the entire $60,000 on that return. Free 2010 turbotax U. Free 2010 turbotax S. Free 2010 turbotax Armed Forces. Free 2010 turbotax   If you are a member of the U. Free 2010 turbotax S. Free 2010 turbotax Armed Forces who qualified as a bona fide resident of Guam in a prior tax year, your absence from Guam solely in compliance with military orders will not change your bona fide residency. Free 2010 turbotax If you did not qualify as a bona fide resident of Guam in a prior tax year, your presence in Guam solely in compliance with military orders will not qualify you as a bona fide resident of Guam. Free 2010 turbotax Civilian spouse of active duty member of the U. Free 2010 turbotax S. Free 2010 turbotax Armed Forces. Free 2010 turbotax   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. Free 2010 turbotax S. Free 2010 turbotax Armed Forces ), your tax residence is Guam, follow the guidance in the section for bona fide residents under Which Return To File, earlier. Free 2010 turbotax However, if your tax residence is one of the 50 states or the District of Columbia and your only income from Guam is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. Free 2010 turbotax S. Free 2010 turbotax tax return (Form 1040) and a state and/or local tax return, if required. Free 2010 turbotax If you have income from Guam other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1), you may need to file Form 5074 with your U. Free 2010 turbotax S. Free 2010 turbotax tax return. Free 2010 turbotax Moving expense deduction. Free 2010 turbotax   Generally, expenses of a move to Guam are directly attributable to wages, salaries, and other earned income from Guam. Free 2010 turbotax Likewise, the expenses of a move back to the United States are generally attributable to U. Free 2010 turbotax S. Free 2010 turbotax earned income. Free 2010 turbotax   If your move was to Guam, report your deduction for moving expenses as follows. Free 2010 turbotax If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your Guam tax return. Free 2010 turbotax If you are not a bona fide resident, enter your deductible expenses on Form 3903 and enter the deductible amount on Form 1040, line 26, and on Form 5074, line 20. Free 2010 turbotax   If your move was to the United States, complete Form 3903 and enter the deductible amount on Form 1040, line 26. Free 2010 turbotax Foreign tax credit. Free 2010 turbotax   Under the filing rules explained earlier, individuals with Guam source income normally will not claim a foreign tax credit on a U. Free 2010 turbotax S. Free 2010 turbotax income tax return for tax paid to Guam. Free 2010 turbotax Self-employment tax. Free 2010 turbotax   If you have no U. Free 2010 turbotax S. Free 2010 turbotax filing requirement, but have income that is effectively connected with a trade or business in Guam, you must file Form 1040-SS with the United States to report your self-employment income and, if necessary, pay self-employment tax. Free 2010 turbotax Additional Medicare Tax. Free 2010 turbotax   Beginning in 2013, you may be required to pay Additional Medicare Tax. Free 2010 turbotax Also, you may need to report Additional Medicare Tax withheld by your employer. Free 2010 turbotax For more information see Additional Medicare Tax under Special Rules for Completing Your U. Free 2010 turbotax S. Free 2010 turbotax Tax Return in chapter 4. Free 2010 turbotax Estimated tax payments. Free 2010 turbotax   To see if you are required to make payments of estimated income tax, self-employment tax, and/or Additional Medicare Tax, to the IRS, get Form 1040-ES. Free 2010 turbotax Payment of estimated tax. Free 2010 turbotax   If you must pay estimated tax, make your payment to the jurisdiction where you would file your income tax return if your tax year were to end on the date your first estimated tax payment is due. Free 2010 turbotax Generally, you should make the rest of your quarterly payments of estimated tax to the jurisdiction where you made your first payment of estimated tax. Free 2010 turbotax However, estimated tax payments to either jurisdiction will be treated as payments to the jurisdiction with which you file the tax return. Free 2010 turbotax   If you make a joint payment of estimated tax, make your payment to the jurisdiction where the spouse who has the greater estimated AGI would have to pay (if a separate payment were made). Free 2010 turbotax For this purpose, income is determined without regard to community property laws. Free 2010 turbotax Early payment. Free 2010 turbotax   If you make your first payment of estimated tax early, follow the rules given earlier to determine where to send it. Free 2010 turbotax If you send it to the wrong jurisdiction, make all later payments to the jurisdiction to which the first payment should have been sent. Free 2010 turbotax   To pay by check or money order, send your payment with the Form 1040-ES payment voucher to:  Department of Revenue and Taxation Government of Guam P. Free 2010 turbotax O. Free 2010 turbotax Box 23607 GMF, GU 96921   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. Free 2010 turbotax irs. Free 2010 turbotax gov/e-pay. Free 2010 turbotax   For information on making estimated income tax payments to the Department of Revenue and Taxation, see Where To Get Forms and Information , earlier. Free 2010 turbotax Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and Guam. Free 2010 turbotax See Double Taxation in chapter 4. Free 2010 turbotax The U. Free 2010 turbotax S. Free 2010 turbotax Virgin Islands The U. Free 2010 turbotax S. Free 2010 turbotax Virgin Islands has its own tax system based on the same tax laws and tax rates that apply in the United States. Free 2010 turbotax An important factor in USVI taxation is whether, during the entire tax year, you are a bona fide resident of the USVI. Free 2010 turbotax Where To Get Forms and Information For information about filing your U. Free 2010 turbotax S. Free 2010 turbotax Virgin Islands tax return or about Form 1040INFO, in St. Free 2010 turbotax Thomas contact : Bureau of Internal Revenue  6115 Estate Smith Bay  St. Free 2010 turbotax Thomas, VI 00802 You can order forms and publications by calling (340) 715-1040. Free 2010 turbotax You can order forms and publications through the fax at (340) 774-2672. Free 2010 turbotax For information about filing your U. Free 2010 turbotax S. Free 2010 turbotax Virgin Islands tax return or about Form 1040INFO, in St. Free 2010 turbotax Croix contact : Bureau of Internal Revenue  4008 Estate Diamond- Plot 7B Christiansted, V. Free 2010 turbotax I. Free 2010 turbotax 00820–4421 You can order forms and publications by calling (340) 773-1040. Free 2010 turbotax You can order forms and publications through the fax at (340) 773-1006. Free 2010 turbotax You can access the USVI website at www. Free 2010 turbotax viirb. Free 2010 turbotax com. Free 2010 turbotax The addresses and phone numbers listed above are subject to change. Free 2010 turbotax Which Return To File In general, bona fide residents of the USVI pay taxes only to the USVI. Free 2010 turbotax U. Free 2010 turbotax S. Free 2010 turbotax citizens or resident aliens (but not bona fide residents of the USVI) with USVI source income pay a portion of the tax to each jurisdiction. Free 2010 turbotax Bona Fide Resident of the USVI File your tax return with the USVI if you are a U. Free 2010 turbotax S. Free 2010 turbotax citizen, resident alien, or nonresident alien and a bona fide resident of the USVI during the entire tax year. Free 2010 turbotax Include your worldwide income on your USVI return. Free 2010 turbotax In determining your total tax payments, take into account all income tax withheld by either the USVI or the United States, any credit for an overpayment of income tax to either the USVI or the United States, and any payments of estimated tax to either the USVI or the United States. Free 2010 turbotax Pay any balance of tax due with your tax return. Free 2010 turbotax Filing this return with the USVI generally also starts the statute of limitations on assessment of your U. Free 2010 turbotax S. Free 2010 turbotax income tax. Free 2010 turbotax You generally do not have to file with the United States for any tax year in which you are a bona fide resident of the USVI during the entire tax year, provided you report and pay tax on your income from all sources to the USVI and identify the source(s) of the income on the return. Free 2010 turbotax However, if you have self-employment income, you may be required to file Form 1040-SS with the United States. Free 2010 turbotax For more information, see Self-employment tax under Special Rules for the USVI, later. Free 2010 turbotax Form 1040INFO. Free 2010 turbotax   If you are a bona fide resident of the USVI and have non-USVI source income, you must also file Virgin Islands Form 1040INFO, Non-Virgin Islands Source Income of Virgin Islands Residents, with the Virgin Islands Bureau of Internal Revenue. Free 2010 turbotax Attach Form 1040INFO to your USVI tax return before filing. Free 2010 turbotax You can get Form 1040INFO by contacting the address or website given earlier. Free 2010 turbotax   If you are a bona fide resident of the USVI for the entire tax year, file your return and all attachments with the Virgin Islands Bureau of Internal Revenue at:  USVI Bureau of Internal Revenue 6115 Estate Smith Bay St. Free 2010 turbotax Thomas, VI 00802 U. Free 2010 turbotax S. Free 2010 turbotax Citizen or Resident Alien (Other Than a Bona Fide Resident of the USVI) If you are a U. Free 2010 turbotax S. Free 2010 turbotax citizen or resident alien but not a bona fide resident of the USVI during the entire tax year, you must file your original Form 1040 with the United States and an identical copy of that return with the USVI if you have: Income from sources in the USVI, or Income effectively connected with the conduct of a trade or business in the USVI. Free 2010 turbotax File your original Form 1040 with the United States and file a signed copy of the U. Free 2010 turbotax S. Free 2010 turbotax return (including all attachments, forms, and schedules) with the Virgin Islands Bureau of Internal Revenue by the due date for filing Form 1040. Free 2010 turbotax Use Form 8689 to figure the amount of tax you must pay to the USVI. Free 2010 turbotax Form 8689. Free 2010 turbotax   Complete this form and attach it to both the return you file with the United States and the copy you file with the USVI. Free 2010 turbotax Figure the amount of tax you must pay to the USVI as follows:      Total tax on  U. Free 2010 turbotax S. Free 2010 turbotax return (after certain adjustments) × USVI AGI Worldwide AGI     Pay any tax due to the USVI when you file your return with the Virgin Islands Bureau of Internal Revenue. Free 2010 turbotax To receive credit on your U. Free 2010 turbotax S. Free 2010 turbotax return for taxes paid to the USVI, include the amounts from Form 8689, lines 40 and 45, in the total on Form 1040, line 72. Free 2010 turbotax On the dotted line next to line 72, enter “Form 8689” and show the amounts. Free 2010 turbotax   See the illustrated example in chapter 5. Free 2010 turbotax De minimis exception to determining source of income. Free 2010 turbotax   In certain situations you will not have income from a possession. Free 2010 turbotax See De minimis exception under Compensation for Labor or Personal Services in chapter 2. Free 2010 turbotax   If you are not a bona fide resident of the USVI during the entire tax year, but you have USVI source income, and you are not including a check or a money order, file Form 1040 and all attachments (including Form 8689) with the:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. Free 2010 turbotax S. Free 2010 turbotax tax return and all attachments (including Form 8689) to:  Internal Revenue Service P. Free 2010 turbotax O. Free 2010 turbotax Box 1303 Charlotte, NC 28201-1303 USA   File a copy of your U. Free 2010 turbotax S. Free 2010 turbotax Form 1040 with the Virgin Islands Bureau of Internal Revenue at:  USVI Bureau of Internal Revenue 6115 Estate Smith Bay St. Free 2010 turbotax Thomas, VI 00802 Nonresident Alien (Other Than a Bona Fide Resident of the USVI) If you are a nonresident alien of the United States who does not qualify as a bona fide resident of the USVI for the entire tax year, you generally must file the following returns. Free 2010 turbotax A USVI tax return reporting only your income from sources within the USVI. Free 2010 turbotax In this situation, wages for services performed in the USVI, whether for a private employer, the U. Free 2010 turbotax S. Free 2010 turbotax Government, or otherwise, is income from sources within the USVI. Free 2010 turbotax A U. Free 2010 turbotax S. Free 2010 turbotax tax return (Form 1040NR) reporting U. Free 2010 turbotax S. Free 2010 turbotax source income according to the rules for a nonresident alien. Free 2010 turbotax See the instructions for Form 1040NR. Free 2010 turbotax   If you are not a bona fide resident of the USVI during the entire tax year, and you are not including a check or a money order, send your U. Free 2010 turbotax S. Free 2010 turbotax tax return and all attachments (including Form 8689) to:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. Free 2010 turbotax S. Free 2010 turbotax tax return and all attachments (including Form 8689) to:  Internal Revenue Service P. Free 2010 turbotax O. Free 2010 turbotax Box 1303 Charlotte, NC 28201-1303  USA   Send your USVI tax return and all attachments to:  Bureau of Internal Revenue 6115 Estate Smith Bay St. Free 2010 turbotax Thomas, VI 00802 Special Rules for the USVI There are some special rules for certain types of income, employment, and filing status. Free 2010 turbotax Joint return. Free 2010 turbotax   If you file a joint return, you should file your return (and pay the tax) with the jurisdiction where the spouse who has the greater adjusted gross income (AGI) would have to file if you were filing separately. Free 2010 turbotax If the spouse with the greater AGI is a bona fide resident of the USVI during the entire tax year, file the joint return with the USVI. Free 2010 turbotax If the spouse with the greater AGI is a U. Free 2010 turbotax S. Free 2010 turbotax citizen or resident alien of the United States but not a bona fide resident of the USVI during the entire tax year, file the joint return with the United States. Free 2010 turbotax For this purpose, income is determined without regard to community property laws. Free 2010 turbotax Example. Free 2010 turbotax Marge Birch, a U. Free 2010 turbotax S. Free 2010 turbotax citizen, was a resident of the United States, and her spouse, a citizen of the USVI, was a bona fide resident of the USVI during the entire tax year. Free 2010 turbotax Marge earned $55,000 as an architect in the United States. Free 2010 turbotax Her spouse earned $30,000 as a librarian in the USVI. Free 2010 turbotax Marge and her spouse will file a joint return. Free 2010 turbotax Because Marge has the greater AGI, she and her spouse must file their return with the United States and report the entire $85,000 on that return. Free 2010 turbotax U. Free 2010 turbotax S. Free 2010 turbotax Armed Forces. Free 2010 turbotax   If you are a member of the U. Free 2010 turbotax S. Free 2010 turbotax Armed Forces who qualified as a bona fide resident of the U. Free 2010 turbotax S. Free 2010 turbotax Virgin Islands in a prior tax year, your absence from the U. Free 2010 turbotax S. Free 2010 turbotax Virgin Islands solely in compliance with military orders will not change your bona fide residency. Free 2010 turbotax If you did not qualify as a bona fide resident of the U. Free 2010 turbotax S. Free 2010 turbotax Virgin Islands in a prior tax year, your presence in the U. Free 2010 turbotax S. Free 2010 turbotax Virgin Islands solely in compliance with military orders will not qualify you as a bona fide resident of the U. Free 2010 turbotax S. Free 2010 turbotax Virgin Islands. Free 2010 turbotax Civilian spouse of active duty member of the U. Free 2010 turbotax S. Free 2010 turbotax Armed Forces. Free 2010 turbotax   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. Free 2010 turbotax S. Free 2010 turbotax Armed Forces ), your tax residence is the USVI, follow the guidance in the section for bona fide residents under Which Return To File, earlier. Free 2010 turbotax However, if your tax residence is one of the 50 states or the District of Columbia and your only income from the USVI is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. Free 2010 turbotax S. Free 2010 turbotax tax return (Form 1040) and a state and/or local tax return, if required. Free 2010 turbotax If you have income from the USVI other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1), you may need to file Form 8689 with your U. Free 2010 turbotax S. Free 2010 turbotax tax return. Free 2010 turbotax In this case, follow the guidance under U. Free 2010 turbotax S. Free 2010 turbotax Citizen or Resident Alien (Other Than a Bona Fide Resident of the USVI ), earlier. Free 2010 turbotax Moving expense deduction. Free 2010 turbotax   Generally, expenses of a move to the USVI are directly attributable to wages, salaries, and other earned income from the USVI. Free 2010 turbotax Likewise, the expenses of a move back to the United States are generally attributable to U. Free 2010 turbotax S. Free 2010 turbotax earned income. Free 2010 turbotax   If your move was to the USVI, report your deduction for moving expenses as follows. Free 2010 turbotax If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your USVI tax return. Free 2010 turbotax If you are not a bona fide resident, enter your deductible expenses on Form 3903 and enter the deductible amount on Form 1040, line 26, and on Form 8689, line 20. Free 2010 turbotax   If your move was to the United States, complete Form 3903 and enter the deductible amount on Form 1040, line 26. Free 2010 turbotax Foreign tax credit. Free 2010 turbotax   Under the filing rules explained earlier, individuals with USVI source income normally will not claim a foreign tax credit on a U. Free 2010 turbotax S. Free 2010 turbotax income tax return for tax paid to the USVI. Free 2010 turbotax However, individuals other than bona fide residents of the USVI may claim a direct credit for such tax (see Form 8689 earlier in this section). Free 2010 turbotax Self-employment tax. Free 2010 turbotax   If you have no U. Free 2010 turbotax S. Free 2010 turbotax filing requirement, but have income that is effectively connected with a trade or business in the USVI, you must file Form 1040-SS with the United States to report your self-employment income and, if necessary, pay self-employment tax. Free 2010 turbotax Additional Medicare Tax. Free 2010 turbotax   Beginning in 2013, you may be required to pay Additional Medicare Tax. Free 2010 turbotax Also, you may need to report Additional Medicare Tax withheld by your employer. Free 2010 turbotax For more information see Additional Medicare Tax under Special Rules for Completing Your U. Free 2010 turbotax S. Free 2010 turbotax Tax Return in chapter 4. Free 2010 turbotax Estimated tax payments. Free 2010 turbotax   To see if you are required to make payments of estimated income tax, self-employment tax, and/or Additional Medicare Tax, to the IRS, get Form 1040-ES. Free 2010 turbotax   To pay by check or money order, send your payment with the Form 1040-ES payment voucher to:  Virgin Islands Bureau of Internal Revenue 6115 Estate Smith Bay St. Free 2010 turbotax Thomas, VI 00802   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. Free 2010 turbotax irs. Free 2010 turbotax gov/e-pay. Free 2010 turbotax   For information on making estimated income tax payments to the Bureau of Internal Revenue, see Where To Get Forms and Information , earlier. Free 2010 turbotax Extension of time to file. Free 2010 turbotax   You can get an automatic 6-month extension of time to file your tax return. Free 2010 turbotax See Extension of Time To File in chapter 4. Free 2010 turbotax Bona fide residents of the USVI during the entire tax year must file a paper Form 4868 with the Virgin Islands Bureau of Internal Revenue. Free 2010 turbotax Nonresidents of the USVI should file separate extension requests with the IRS and the Virgin Islands Bureau of Internal Revenue and make any payments due to the respective jurisdictions. Free 2010 turbotax However, the Virgin Islands Bureau of Internal Revenue will honor an extension request that is timely filed with the IRS. Free 2010 turbotax Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and the U. Free 2010 turbotax S. Free 2010 turbotax Virgin Islands. Free 2010 turbotax See Double Taxation in chapter 4. Free 2010 turbotax Prev  Up  Next   Home   More Online Publications
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Understanding your CP10A Notice

We made a change(s) to your return because we believe there's a miscalculation involving your Earned Income Credit. This change(s) affected the estimated tax payment you wanted applied to your taxes for next year.

Tax publications you may find useful

How to get help

Calling the toll free number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).

Or you may qualify for help from a Low Income Taxpayer Clinic.
 


What you need to do

  • Read your notice carefully ― it will explain why we were unable to apply the amount you requested to next year’s taxes. It also will suggest additional steps for you to take, depending on your situation.
  • Correct the copy of your tax return that you kept for your records.
  • Adjust this year's estimated tax payments to avoid a possible underpayment of next year's taxes.

You may want to...


Answers to Common Questions

How do I adjust my estimated tax payments?
You can adjust your estimated tax payments with a Form 1040-ES, Estimated Tax for Individuals. For more information, see Publication 505, Tax Withholding and Estimated Tax.

How can I find out what caused my tax return to change?
Please contact us at the number listed on your notice for specific information concerning your tax return.

What should I do if I disagree with the changes you made?
If you disagree, contact us at the toll free number listed on the top right corner of your notice.

If you contact us in writing within 60 days of the date of this notice, we'll reverse the change we made to your account. However, if you're unable to provide us additional information that justifies the reversal and we believe the reversal is in error, we'll forward your case for audit. This step gives you formal appeal rights, including the right to appeal our decision in court before you have to pay the additional tax. After we forward your case, the audit staff will contact you within five to six weeks to fully explain the audit process and your rights. If you don’t contact us within the 60-day period, you'll lose your right to appeal our decision before payment of tax.

If you don't contact us within 60 days, the change won’t be reversed and you must pay the additional tax. You may then file a claim for refund. You must submit the claim within three years of the date you filed the tax return, or within two years of the date of your last payment for this tax.

What's the difference between the "Child Tax Credit" and the "Additional Child Tax Credit?" Can I qualify for both?
The Child Tax Credit is for people who have a qualifying child. The maximum amount you can claim is $1000 for each qualifying child. The Additional Child Tax Credit is for individuals who receive less than the full amount of Child Tax Credit. You may qualify for both the Child Tax Credit and the Additional Child Tax Credit.

How do I claim an Additional Child Tax Credit?
You claim the credit by completing a Form 1040 Schedule 8812, Child Tax Credit and attaching it to your income tax return.

My child is turning 18 this year. Can I still get the Additional Child Tax Credit?
No. Your child must be under age 17 at the end of 2009 to qualify for both the Child Tax Credit and the Additional Child Tax Credit.


Tips for next year

Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions that you may qualify for. In many cases you can file for free. Learn more about e-file.

If you have any dependent children, remember to claim the Additional Child Tax Credit the next time you file your income tax return. Complete and attach a Form 1040 Schedule 8812, Child Tax Credit to your return to claim this credit.

Use the EITC Assistant to help you complete your Schedule EIC, Earned Income Credit and claim your Earned Income Credit.

Page Last Reviewed or Updated: 28-Mar-2014

The Free 2010 Turbotax

Free 2010 turbotax Internal Revenue Bulletin:  2009-36  September 8, 2009  Rev. Free 2010 turbotax Proc. Free 2010 turbotax 2009-37 Table of Contents SECTION 1. Free 2010 turbotax PURPOSE SECTION 2. Free 2010 turbotax BACKGROUND SECTION 3. Free 2010 turbotax SCOPE SECTION 4. Free 2010 turbotax ELECTION PROCEDURES SECTION 5. Free 2010 turbotax REQUIRED INFORMATION STATEMENT SECTION 6. Free 2010 turbotax EFFECTIVE DATE SECTION 7. Free 2010 turbotax TRANSITION RULE SECTION 8. Free 2010 turbotax PAPERWORK REDUCTION ACT DRAFTING INFORMATION SECTION 1. Free 2010 turbotax PURPOSE . Free 2010 turbotax 01 This revenue procedure provides the exclusive procedures for taxpayers to make an election to defer recognizing discharge of indebtedness income (“COD income”) under § 108(i) of the Internal Revenue Code. Free 2010 turbotax . Free 2010 turbotax 02 This revenue procedure also requires taxpayers making the § 108(i) election to provide additional information on returns beginning with the taxable year following the taxable year for which the taxpayer makes the election. Free 2010 turbotax This revenue procedure describes the time and manner of providing this additional information. Free 2010 turbotax . Free 2010 turbotax 03 The Internal Revenue Service and Treasury Department intend to issue additional guidance under § 108(i) that may include regulations addressing matters in this revenue procedure. Free 2010 turbotax Taxpayers should be aware that these regulations may be retroactive. Free 2010 turbotax See § 7805(b)(2). Free 2010 turbotax This revenue procedure may be modified to provide procedures consistent with additional guidance. Free 2010 turbotax SECTION 2. Free 2010 turbotax BACKGROUND . Free 2010 turbotax 01 Section 108(i), Generally. Free 2010 turbotax Section 108(i) was added to the Code by § 1231 of the American Recovery and Reinvestment Tax Act of 2009, Pub. Free 2010 turbotax L. Free 2010 turbotax No. Free 2010 turbotax 111-5, 123 Stat. Free 2010 turbotax 338. Free 2010 turbotax In general, § 108(i) provides that, at the election of a taxpayer, COD income realized in connection with a reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument is includible in gross income ratably over a 5-taxable-year inclusion period, beginning with the taxpayer’s fourth or fifth taxable year following the taxable year of the reacquisition. Free 2010 turbotax Generally, if a taxpayer makes a § 108(i) election and reacquires (or is treated as reacquiring) the applicable debt instrument generating the COD income for a new debt instrument with original issue discount (“OID”), then interest deductions for this OID also are deferred, as provided in § 108(i)(2). Free 2010 turbotax The OID deferral rule, however, does not apply if the amount of OID is less than a de minimis amount, as determined under § 1273(a)(3) and § 1. Free 2010 turbotax 1273-1(d) of the Income Tax Regulations. Free 2010 turbotax The OID deferral rule in § 108(i)(2) applies at the entity level for a pass-through entity. Free 2010 turbotax For example, a partnership (and therefore its partners) may not deduct currently the OID described in § 108(i)(2)(A)(i). Free 2010 turbotax A taxpayer must take into account any item of income or deduction deferred under § 108(i), and not previously taken into account, in the taxable year in which certain events occur (such as the liquidation of the taxpayer and upon other events specified in administrative guidance). Free 2010 turbotax See § 108(i)(5)(D). Free 2010 turbotax The rule regarding acceleration of deferred COD income and OID deductions also applies in the case of certain dispositions by persons holding ownership interests in pass-through entities. Free 2010 turbotax Section 108(i)(5)(D)(ii). Free 2010 turbotax For purposes of § 108(i), regulated investment companies (as defined in § 851(a)) and real estate investment trusts (as defined in § 856(a)) are not pass-through entities. Free 2010 turbotax . Free 2010 turbotax 02 Applicable Debt Instrument. Free 2010 turbotax Section 108(i)(3)(A) defines the term “applicable debt instrument” to mean any debt instrument issued by a C corporation or by any other person in connection with the conduct of a trade or business by that person. Free 2010 turbotax The term “debt instrument” means any bond, debenture, note, certificate, or any other instrument or contractual arrangement constituting indebtedness within the meaning of § 1275(a)(1). Free 2010 turbotax Section 108(i)(3)(B). Free 2010 turbotax For purposes of § 108(i), in the case of an intercompany obligation (as defined in § 1. Free 2010 turbotax 1502-13(g)(2)(ii)), an applicable debt instrument includes only an instrument for which COD income is realized upon the instrument’s deemed satisfaction under § 1. Free 2010 turbotax 1502-13(g)(5). Free 2010 turbotax . Free 2010 turbotax 03 Reacquisition. Free 2010 turbotax Section 108(i)(4)(A) defines the term “reacquisition” to mean, with respect to any applicable debt instrument, any acquisition of the debt instrument by the debtor that issued (or is otherwise the obligor under) the debt instrument, or a person related to the debtor under § 108(e)(4). Free 2010 turbotax The term “acquisition” includes an acquisition of the debt instrument for cash or other property, the exchange of the debt instrument for another debt instrument (including an exchange resulting from a modification of the debt instrument), the exchange of the debt instrument for corporate stock or a partnership interest, the contribution of the debt instrument to capital, and the complete forgiveness of the indebtedness by the holder of the debt instrument. Free 2010 turbotax See § 108(i)(4)(B). Free 2010 turbotax The term “acquisition” also includes an indirect acquisition within the meaning of § 1. Free 2010 turbotax 108-2(c) if a direct acquisition of the debt instrument would qualify for an election under § 108(i). Free 2010 turbotax For example, if a corporation acquires debt of a partnership that the partnership issued in connection with its trade or business, and the partnership and corporation become related within six months of the corporation’s acquisition of the debt, the indirect acquisition is an acquisition for which an election under § 108(i) may be made. Free 2010 turbotax . Free 2010 turbotax 04 General Requirements for the Section 108(i) Election. Free 2010 turbotax Section 108(i)(5)(B) provides, in general, that a taxpayer makes the § 108(i) election by including a statement that clearly identifies the applicable debt instrument with the return of tax imposed for the taxable year in which the reacquisition of the instrument occurs. Free 2010 turbotax (For purposes of this revenue procedure, a return of tax or income tax return includes an information return, and a taxpayer includes a person that files an information return. Free 2010 turbotax ) The statement must include the amount of income to which § 108(i)(1) applies and other information the Service may prescribe. Free 2010 turbotax Once made, a § 108(i) election is irrevocable and, except as provided in section 7 of this revenue procedure, may not be modified. Free 2010 turbotax . Free 2010 turbotax 05 Section 108(i) Elections Made by Pass-through Entities. Free 2010 turbotax In the case of COD income realized by a pass-through entity from the reacquisition of an applicable debt instrument, the pass-through entity makes the § 108(i) election. Free 2010 turbotax Section 108(i)(5)(B)(iii). Free 2010 turbotax . Free 2010 turbotax 06 Additional Information on Subsequent Years’ Returns. Free 2010 turbotax Section 108(i)(7) authorizes the Service to issue guidance necessary or appropriate for applying § 108(i), including requiring reporting the election and other information on returns of tax for subsequent taxable years. Free 2010 turbotax . Free 2010 turbotax 07 Exclusivity. Free 2010 turbotax Section 108(i)(5)(C) provides that if a taxpayer elects to apply § 108(i) to an applicable debt instrument, § 108(a)(1)(A), (B), (C), and (D) do not apply to COD income deferred under § 108(i). Free 2010 turbotax . Free 2010 turbotax 08 Allocation of Deferred COD Income on Partnership Indebtedness. Free 2010 turbotax Section 4. Free 2010 turbotax 04(3) of this revenue procedure describes how a partnership may elect under § 108(i) to defer a portion of the COD income realized from the reacquisition of an applicable debt instrument. Free 2010 turbotax If a partnership elects to defer all or any portion of COD income realized from the reacquisition of an applicable debt instrument, all of the COD income with respect to that debt instrument, without regard to § 108(i), is allocated to the partners in the partnership immediately before the reacquisition in the manner in which the income would be included in the distributive shares of these partners under § 704 and the regulations thereunder, including § 1. Free 2010 turbotax 704-1(b)(2)(iii). Free 2010 turbotax Each partner’s share of this COD income is the partner’s COD income amount (“COD income amount”). Free 2010 turbotax The partner’s COD income amount that is deferred under § 108(i) is the partner’s deferred amount (“deferred amount”). Free 2010 turbotax The partner’s COD income amount that is not deferred and is included in the partner’s distributive share of partnership income for the taxable year of the partnership in which the reacquisition occurs is the partner’s included amount (“included amount”). Free 2010 turbotax . Free 2010 turbotax 09 Partner’s Deferred § 752 Amount. Free 2010 turbotax A decrease in a partner’s share of a partnership liability resulting from the reacquisition of an applicable debt instrument that is not treated as a current distribution of money to the partner under § 752 by reason of § 108(i)(6) is the partner’s deferred § 752 amount (“deferred § 752 amount”). Free 2010 turbotax A partner’s deferred § 752 amount may not exceed the lesser of (i) the partner’s deferred amount or (ii) gain that the partner would recognize in the year of reacquisition under § 731 as a result of the reacquisition absent § 108(i)(6). Free 2010 turbotax To determine the amount of gain the partner would recognize under clause (ii) of the preceding sentence, the amount of any deemed distribution of money under § 752(b) resulting from the decrease in the partner’s share of a reacquired applicable debt instrument that is treated as an advance or draw of money under § 1. Free 2010 turbotax 731-1(a)(1)(ii) is determined as if no COD income resulting from the reacquisition of the applicable debt instrument is deferred under § 108(i). Free 2010 turbotax See Rev. Free 2010 turbotax Rul. Free 2010 turbotax 92-97, 1992-2 C. Free 2010 turbotax B. Free 2010 turbotax 124, and Rev. Free 2010 turbotax Rul. Free 2010 turbotax 94-4, 1994-1 C. Free 2010 turbotax B. Free 2010 turbotax 195. Free 2010 turbotax A partner’s deferred § 752 amount is treated as a distribution of money to the partner under § 752 at the same time, and to the extent remaining in the same amount, as the partner recognizes the COD income deferred under § 108(i). Free 2010 turbotax . Free 2010 turbotax 10 Allocation of Deferred COD Income on S Corporation Indebtedness. Free 2010 turbotax For purposes of § 108(i), an S corporation’s COD income deferred under § 108(i) is shared pro rata only among those shareholders that are shareholders of the S corporation immediately before the reacquisition transaction. Free 2010 turbotax . Free 2010 turbotax 11 Deferred COD Income, Earnings and Profits, and Alternative Minimum Taxable Income. Free 2010 turbotax (1) In general. Free 2010 turbotax The Service and Treasury Department intend to issue regulations regarding the computation of a corporation’s earnings and profits with respect to COD income and OID deductions that are deferred under § 108(i). Free 2010 turbotax These regulations generally will provide that deferred COD income increases earnings and profits in the taxable year that it is realized and not in the taxable year or years that the deferred COD income is includible in gross income. Free 2010 turbotax OID deductions deferred under § 108(i) generally will decrease earnings and profits in the taxable year or years in which the deduction would be allowed without regard to § 108(i). Free 2010 turbotax COD income and OID deductions that are deferred increase or decrease adjusted current earnings under § 56(g)(4) in the taxable year or years that the income or deduction is includible or deductible in determining taxable income. Free 2010 turbotax See § 1. Free 2010 turbotax 56(g)-1(c)(1). Free 2010 turbotax (2) Exceptions for certain special status corporations. Free 2010 turbotax The Service and Treasury Department intend to issue regulations providing that in the case of regulated investment companies and real estate investment trusts, COD income deferred under § 108(i) generally increases earnings and profits in the taxable year or years in which the deferred COD income is includible in gross income and not in the year that the deferred COD income is realized. Free 2010 turbotax OID deductions deferred under § 108(i) generally decrease earnings and profits in the taxable year or years that the deferred OID deductions are deductible. Free 2010 turbotax . Free 2010 turbotax 12 Extension of Time to Make Election. Free 2010 turbotax Under § 301. Free 2010 turbotax 9100-1 of the Procedure and Administration Regulations, the Service may grant an extension of time to make a regulatory election. Free 2010 turbotax An election is a regulatory election if the due date is prescribed by regulation or other published guidance of general applicability. Free 2010 turbotax Section 301. Free 2010 turbotax 9100-2(a) provides an automatic 12-month extension from the due date for making certain regulatory elections. Free 2010 turbotax SECTION 3. Free 2010 turbotax SCOPE This revenue procedure applies to taxpayers that realize COD income from a reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument, as provided in § 108(i). Free 2010 turbotax SECTION 4. Free 2010 turbotax ELECTION PROCEDURES . Free 2010 turbotax 01 In General. Free 2010 turbotax (1) A taxpayer within the scope of this revenue procedure makes the § 108(i) election by— (a) Attaching a statement meeting the requirements of section 4. Free 2010 turbotax 05 of this revenue procedure to the taxpayer’s timely filed (including extensions) original federal income tax return for the taxable year in which the reacquisition of the applicable debt instrument occurs, and (b) If applicable, satisfying the additional requirements of section 4. Free 2010 turbotax 07, 4. Free 2010 turbotax 08, 4. Free 2010 turbotax 09, or 4. Free 2010 turbotax 10 of this revenue procedure. Free 2010 turbotax (2) The Service grants an automatic extension of 12 months from the due date prescribed in section 4. Free 2010 turbotax 01(1)(a) of this revenue procedure for making the § 108(i) election. Free 2010 turbotax The rules that apply to an automatic extension under § 301. Free 2010 turbotax 9100-2(a) apply to this automatic extension. Free 2010 turbotax . Free 2010 turbotax 02 Section 108(i) Elections Made by Members of Consolidated Groups. Free 2010 turbotax The common parent of a consolidated group makes the § 108(i) election on behalf of all members of the group. Free 2010 turbotax See § 1. Free 2010 turbotax 1502-77(a). Free 2010 turbotax . Free 2010 turbotax 03 Aggregation Rule. Free 2010 turbotax A taxpayer within the scope of this revenue procedure may treat two or more applicable debt instruments that are part of the same issue and that are reacquired during the same taxable year as one applicable debt instrument for purposes of this revenue procedure. Free 2010 turbotax A pass-through entity may not treat two or more applicable debt instruments as one applicable debt instrument under this section 4. Free 2010 turbotax 03 if the owners and their ownership interests in the pass-through entity immediately prior to the reacquisition of each applicable debt instrument are not identical. Free 2010 turbotax . Free 2010 turbotax 04 Partial Elections. Free 2010 turbotax (1) A taxpayer within the scope of this revenue procedure may make an election for any portion of COD income realized from the reacquisition of any applicable debt instrument. Free 2010 turbotax Thus, for example, if a taxpayer realizes $100 of COD income from the reacquisition of an applicable debt instrument, the taxpayer may elect under § 108(i)(1) to defer only $40 of the $100 of COD income. Free 2010 turbotax The taxpayer may exclude from income the portion of COD income that the taxpayer does not elect to defer under § 108(i) ($60 in this example) under § 108(a)(1)(A), (B), (C), or (D), if applicable. Free 2010 turbotax (2) A taxpayer is not required to make an election for the same portion of COD income arising from each applicable debt instrument that it reacquires, but may make an election for different portions of COD income arising from different applicable debt instruments (whether or not part of the same issue). Free 2010 turbotax Thus, for example, if a taxpayer realizes $100 of COD income from the reacquisition of an applicable debt instrument (Instrument A) and $100 of COD income from the reacquisition of a different applicable debt instrument (Instrument B), the taxpayer may elect to defer all or a portion of the COD income associated with Instrument A and none or a different portion of the COD income associated with Instrument B. Free 2010 turbotax (3) A partnership that elects to defer less than all of the COD income realized from the reacquisition of an applicable debt instrument may determine, in any manner, the portion, if any, of a partner’s COD income amount that is the partner’s deferred amount and the portion, if any, of a partner’s COD income amount that is the partner’s included amount. Free 2010 turbotax Thus, for example, one partner’s deferred amount may be zero while another partner’s deferred amount may equal that partner’s COD income amount (or any portion thereof). Free 2010 turbotax A partner may exclude from income the partner’s included amount under § 108(a)(1)(A), (B), (C), or (D), if applicable. Free 2010 turbotax The provisions of this section 4. Free 2010 turbotax 04(3) apply for purposes of § 108(i) only and are not intended as an interpretation of or a change to existing law under § 704. Free 2010 turbotax . Free 2010 turbotax 05 Contents of Election Statement. Free 2010 turbotax A statement meets the requirements of this section 4. Free 2010 turbotax 05 if the statement— (1) Label. Free 2010 turbotax States “Section 108(i) Election” across the top. Free 2010 turbotax (2) Required information. Free 2010 turbotax Provides, for each applicable debt instrument the reacquisition of which generates COD income that the taxpayer is electing to defer under § 108(i)— (a) The name and taxpayer identification numbers, if any, of the issuer or issuers of the applicable debt instrument; (b) A general description of the applicable debt instrument (including the issue and maturity dates) and, in the case of any person other than a C corporation, a general description of the person’s trade or business to which the applicable debt instrument is connected; (c) A general description of the reacquisition transaction or transactions generating the COD income (including the date(s) of the transaction(s)); (d) The total amount of COD income for the applicable debt instrument that results from the reacquisition (in the case of a partnership, the aggregate of the partners’ COD income amounts) and a general description of the manner in which this amount is calculated; (e) The amount of COD income for the applicable debt instrument that the taxpayer is electing to defer under § 108(i); (f) In the case of a partnership, a list of partners that have a deferred amount, their identifying information and each partner’s deferred amount; and in the case of an S corporation, a list of shareholders with COD income deferred under § 108(i), their identifying information and each shareholder’s share of the S corporation’s deferred COD income; and (g) In cases in which a new debt instrument is issued or deemed issued in exchange for the applicable debt instrument (including exchanges under § 108(e)(4), § 108(i)(2)(B), and § 1. Free 2010 turbotax 1001-3), the issuer’s name, the issuer’s taxpayer identification number, if any, a general description of the new debt instrument and whether the new debt instrument has OID, and if the new debt instrument has OID, a schedule of the OID that the issuer expects to accrue each taxable year on the instrument and the amount of OID that the issuer expects to defer under § 108(i)(2) each taxable year. Free 2010 turbotax . Free 2010 turbotax 06 Supplemental information. Free 2010 turbotax The statement described in section 4. Free 2010 turbotax 05 of this revenue procedure may specify for each applicable debt instrument an amount greater than the amount identified in section 4. Free 2010 turbotax 05(2)(e) of this revenue procedure that the taxpayer elects to defer under § 108(i) in the event the Service subsequently concludes that the taxpayer understated the amount of COD income described in section 4. Free 2010 turbotax 05(2)(d) of this revenue procedure. Free 2010 turbotax This additional amount of COD income the taxpayer elects to defer may be described as the entire additional COD income, or as a percentage of any additional COD income. Free 2010 turbotax If the taxpayer is a partnership, the partnership must specify each partner’s share of the partnership’s additional COD income that would be deferred (the partner’s additional deferred amount), which the partnership may describe for each partner as the partner’s entire share of the partnership’s additional COD income or as a percentage of the partner’s share of the partnership’s additional COD income. Free 2010 turbotax If the taxpayer is an S corporation, the S corporation must specify each shareholder’s share of the S corporation’s additional COD income that would be deferred, which the S corporation may describe for each shareholder as the shareholder’s entire share of the S corporation’s additional COD income or as a percentage of the shareholder’s share of the S corporation’s additional COD income. Free 2010 turbotax In the case of partnerships and S corporations, the additional COD income and the portion of additional COD income that would be deferred are allocated or determined as provided in sections 2. Free 2010 turbotax 08, 2. Free 2010 turbotax 10 and, if applicable, 4. Free 2010 turbotax 04(3) of this revenue procedure, respectively, as if the additional COD income was realized. Free 2010 turbotax . Free 2010 turbotax 07 Additional Requirements for Certain Partnerships Making a § 108(i) Election. Free 2010 turbotax The rules of this section 4. Free 2010 turbotax 07 apply to partnerships other than partnerships described in section 4. Free 2010 turbotax 10 of this revenue procedure. Free 2010 turbotax (1) Information filing on Schedule K-1 (Form 1065 and Form 1065-B). Free 2010 turbotax For the taxable year in which the § 108(i) election is made, the partnership must report on the Schedule K-1 (Form 1065 or Form 1065-B), Partner’s Share of Income, Deductions, Credits, etc. Free 2010 turbotax , in the manner specified in the instructions to the forms, for each partner § 108(i) information on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made. Free 2010 turbotax Partnerships reporting § 108(i) information on the 2008 Schedule K-1 (Form 1065 or Form 1065-B) must report for each partner on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made: (a) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(1) or § 108(i)(5)(D)(i) or (ii), in box 11 (“other income”) using code F for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (b) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii) or § 108(i)(5)(D)(i) or (ii), in box 13 (“other deductions”) using code W for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (c) The partner’s deferred amount that has not been included in income in the current or prior taxable years, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (d) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (e) The partner’s deferred § 752 amount that is treated as a distribution of money to the partner under § 752 in the current taxable year, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); and (f) The partner’s deferred § 752 amount remaining as of the end of the current taxable year, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B). Free 2010 turbotax (2) Election information statement provided to partners. Free 2010 turbotax The partnership must attach to the Schedule K-1 (Form 1065 or Form 1065-B) provided to each partner for the taxable year in which the § 108(i) election is made a statement satisfying the requirements of this section 4. Free 2010 turbotax 07(2). Free 2010 turbotax The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner must retain that partner’s statement, in their respective books and records. Free 2010 turbotax A statement meets the requirements of this section 4. Free 2010 turbotax 07(2) if the statement— (a) Label. Free 2010 turbotax States “Section 108(i) Election Information Statement for Partners” across the top. Free 2010 turbotax (b) Required information. Free 2010 turbotax Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies— (i) The partner’s COD income amount, the partner’s deferred amount, and the partner’s included amount; (ii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (iv) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); (v) The partner’s share of each liability of the partnership described in section 4. Free 2010 turbotax 05(2)(g) of this revenue procedure; (vi) The partner’s share of the decrease in the partnership liability that results from the reacquisition of the applicable debt instrument; (vii) The partner’s share of the decrease in the partnership liability that results from the reacquisition of the applicable debt instrument that is treated as a distribution of money to the partner under § 752 in the current taxable year; (viii) The partner’s deferred § 752 amount as described in section 2. Free 2010 turbotax 09 of this revenue procedure; (ix) The partner’s additional deferred amount as described in section 4. Free 2010 turbotax 06 of this revenue procedure; and (x) The date of the reacquisition transaction generating the COD income. Free 2010 turbotax (c) If a partner fails to provide the written statement required by section 4. Free 2010 turbotax 07(3) of this revenue procedure, the partnership must indicate that the amounts described in section 4. Free 2010 turbotax 07(2)(b)(vii) and (viii) of this revenue procedure cannot be calculated because the partner did not provide the information necessary to report these amounts. Free 2010 turbotax (3) Partner reporting requirements. Free 2010 turbotax The partnership must make reasonable efforts prior to making a § 108(i) election to secure from each partner with a deferred amount for which it does not have the information necessary to compute the partner’s basis in its partnership interest (and its deferred § 752 amount as described in section 2. Free 2010 turbotax 09 of this revenue procedure) a written statement signed under penalties of perjury that includes this information. Free 2010 turbotax Each partner with a deferred amount must provide this written statement to the partnership within 30 days of the date of request by the partnership. Free 2010 turbotax A partner’s failure to comply with this reporting requirement does not invalidate the partnership’s election under § 108(i) for an applicable debt instrument only if the partnership makes reasonable efforts before making the § 108(i) election to obtain the written statement from the partner and otherwise complies with the requirements of section 4 of this revenue procedure. Free 2010 turbotax If a partner provides its written statement under this section 4. Free 2010 turbotax 07(3) after the partnership has provided to the partner the Section 108(i) Election Information Statement for Partners, the partnership must provide to the partner a revised Section 108(i) Election Information Statement for Partners reporting the information required under section 4. Free 2010 turbotax 07(2)(b)(vii) and (viii) of this revenue procedure and report the partner’s deferred § 752 amount on the partner’s Schedule K-1 (Form 1065 or Form 1065-B) in subsequent taxable years. Free 2010 turbotax . Free 2010 turbotax 08 Additional Requirements for an S Corporation Making a § 108(i) Election. Free 2010 turbotax (1) Information filing on Schedule K-1 (Form 1120S). Free 2010 turbotax For the taxable year in which the § 108(i) election is made, the S corporation must report on the Schedule K-1 (Form 1120S), Shareholder’s Share of Income, Deductions, Credits, etc. Free 2010 turbotax , in the manner specified in the instructions to the forms, for each shareholder § 108(i) information on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made. Free 2010 turbotax S corporations reporting § 108(i) information on the 2008 Schedule K-1 (Form 1120S) must report for each shareholder, on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made, the shareholder’s share of the S corporation’s: (a) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(1) or § 108(i)(5)(D)(i) or (ii), in box 10 (“other income”) using code E; (b) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii), or § 108(i)(5)(D)(i) or (ii), in box 12 (“other deductions”) using code S; (c) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years, in box 17 (“other information”) using code T; and (d) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years, in box 17 (“other information”) using code T. Free 2010 turbotax (2) Election information statement provided to shareholders. Free 2010 turbotax The S corporation must attach to the Schedule K-1 (Form 1120S) provided to each shareholder for the taxable year in which the § 108(i) election is made, a statement satisfying the requirements of this section 4. Free 2010 turbotax 08(2). Free 2010 turbotax The S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each shareholder must retain that shareholder’s statement, in their respective books and records. Free 2010 turbotax A statement meets the requirements of this section 4. Free 2010 turbotax 08(2) if the statement— (a) Label. Free 2010 turbotax States “Section 108(i) Election Information Statement for Shareholders” across the top. Free 2010 turbotax (b) Required information. Free 2010 turbotax Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies, the shareholder’s share of the S corporation’s— (i) COD income that the S corporation elects to defer under § 108(i); (ii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iii) OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (iv) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); and (v) Additional COD income that would be deferred as described in section 4. Free 2010 turbotax 06 of this revenue procedure. Free 2010 turbotax . Free 2010 turbotax 09 Section 108(i) Elections Made on Behalf of Certain Foreign Corporations. Free 2010 turbotax The controlling domestic shareholder(s) (or common parent of the controlling domestic shareholder(s), if applicable) of a controlled foreign corporation or a noncontrolled § 902 corporation not otherwise required to file a return of tax may make the § 108(i) election on behalf of the foreign corporation by satisfying the requirements of § 1. Free 2010 turbotax 964-1(c)(3). Free 2010 turbotax Each controlling domestic shareholder must attach a statement identifying the foreign corporation and satisfying the requirements of section 4. Free 2010 turbotax 05 of this revenue procedure and, if applicable, section 4. Free 2010 turbotax 06 of this revenue procedure, to its federal income tax return for the taxable year ending within or with the taxable year of the foreign corporation for which the § 108(i) election is made. Free 2010 turbotax . Free 2010 turbotax 10 Section 108(i) Elections Made By Certain Foreign Partnerships. Free 2010 turbotax The rules of this section 4. Free 2010 turbotax 10 apply to a foreign partnership making a § 108(i) election that is not otherwise required to file a federal partnership return (“nonfiling foreign partnership”). Free 2010 turbotax See § 1. Free 2010 turbotax 6031(a)-1(b). Free 2010 turbotax (1) A nonfiling foreign partnership making the election must attach a statement satisfying the requirements of section 4. Free 2010 turbotax 05 of this revenue procedure and, if applicable, section 4. Free 2010 turbotax 06 of this revenue procedure, to a partnership return satisfying the requirements of § 1. Free 2010 turbotax 6031(a)-1(b)(5) it files with the Service. Free 2010 turbotax In addition, a nonfiling foreign partnership must include in the information required in section 4. Free 2010 turbotax 05(2)(d) and (e) of this revenue procedure the aggregate amounts for all partners as well as the aggregate amounts for all U. Free 2010 turbotax S. Free 2010 turbotax persons (as defined in § 7701(a)(30)) and controlled foreign corporation(s) that are partners with deferred amounts in the nonfiling foreign partnership (“affected partners”). Free 2010 turbotax (2) The nonfiling foreign partnership must make the election, in accordance with § 1. Free 2010 turbotax 6031(a)-1(b)(5), by the date provided in section 4. Free 2010 turbotax 01(1)(a) of this revenue procedure, as if it had a filing obligation for the taxable year in which the reacquisition of the applicable debt instrument occurs. Free 2010 turbotax (3) For each affected partner, the partnership must file with the Service a Schedule K-1 (Form 1065) and report on the Schedule K-1 (Form 1065) for the affected partner as provided in section 4. Free 2010 turbotax 07(1) of this revenue procedure. Free 2010 turbotax Except for this § 108(i) information, the partnership need not complete Part III of the Schedule K-1 (Form 1065). Free 2010 turbotax The partnership must provide a copy of the respective Schedule K-1 (Form 1065) to each affected partner and must also attach to the Schedule K-1 (Form 1065) provided to each affected partner a statement satisfying the requirements of section 4. Free 2010 turbotax 07(2) of this revenue procedure by the date provided in section 4. Free 2010 turbotax 01(1)(a) of this revenue procedure. Free 2010 turbotax The partnership should not attach any statement described in section 4. Free 2010 turbotax 07(2) of this revenue procedure to the Schedules K-1 that are filed with the Service. Free 2010 turbotax However, the partnership must retain the statements provided to the affected partners, and each affected partner must retain that partner’s statement, in their respective books and records. Free 2010 turbotax (4) The partnership and each affected partner must satisfy the requirements of section 4. Free 2010 turbotax 07(3) of this revenue procedure. Free 2010 turbotax . Free 2010 turbotax 11 Protective § 108(i) Election. Free 2010 turbotax (1) In general. Free 2010 turbotax A taxpayer may make a protective election under § 108(i) for an applicable debt instrument if the taxpayer concludes that a particular transaction does not result in the realization of COD income, reports the transaction on its federal income tax return in a manner consistent with the taxpayer’s conclusion, and would be within the scope of this revenue procedure if the taxpayer’s conclusion were incorrect. Free 2010 turbotax If the Service at any time determines the taxpayer’s conclusion that the particular transaction does not result in the realization of COD income is incorrect, the taxpayer’s protective election is treated as a valid, irrevocable election under § 108(i). Free 2010 turbotax Thus, if a taxpayer makes a protective election, the Service subsequently may require the taxpayer to report COD income deferred pursuant to the valid and irrevocable protective election even if the statute of limitations has expired for the year in which the COD income was realized and the protective election was made. Free 2010 turbotax A taxpayer makes a protective election by attaching a statement satisfying the requirements of this section 4. Free 2010 turbotax 11(1) to the taxpayer’s original federal income tax return within the period described in section 4. Free 2010 turbotax 01(1)(a) of this revenue procedure. Free 2010 turbotax The taxpayer also must attach the election to its federal income tax return in each of the 8 or 9 taxable years, as applicable, following the taxable year of the election. Free 2010 turbotax A statement meets the requirements of this section 4. Free 2010 turbotax 11(1) if the statement— (a) States “Section 108(i) Protective Election” across the top; (b) Provides the information required under section 4. Free 2010 turbotax 05(2)(a), (b), and (c) of this revenue procedure; (c) Provides that the amounts described in sections 4. Free 2010 turbotax 05(2)(d) and (e) of this revenue procedure are zero; and (d) Provides the information described in section 4. Free 2010 turbotax 06 of this revenue procedure. Free 2010 turbotax (2) Statements provided to shareholders and partners. Free 2010 turbotax (a) For each applicable debt instrument, a partnership or S corporation that makes a protective election must attach to the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) it provides each of its partners or shareholders, as the case may be, for the taxable year in which the protective election is made a statement containing the information described in section 4. Free 2010 turbotax 11(1)(b) of this revenue procedure (an S corporation need not provide its shareholders with the date(s) of the transaction(s) that would constitute the reacquisition transaction or transactions) and the partner’s or shareholder’s share of the additional COD income that would be deferred as described in section 4. Free 2010 turbotax 11(1)(d) of this revenue procedure. Free 2010 turbotax (b) The partnership or S corporation should not attach the statements described in this section 4. Free 2010 turbotax 11(2) to the Schedules K-1 that are filed with the Service but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. Free 2010 turbotax . Free 2010 turbotax 12 Election-Year Reporting by Tiered Pass-Through Entities. Free 2010 turbotax (1) A partnership required to file a U. Free 2010 turbotax S. Free 2010 turbotax partnership return other than under § 1. Free 2010 turbotax 6031(a)-1(b)(5), or an S corporation, that receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting its share of any items listed in section 4. Free 2010 turbotax 07(1) of this revenue procedure, must report on the Schedules K-1 (Form 1065, Form 1065-B, or Form 1120S) to its partners or shareholders, as the case may be, each partner’s or shareholder’s share of those items (an S corporation only reports to its shareholders the items described in section 4. Free 2010 turbotax 07(1)(a) through (d) of this revenue procedure). Free 2010 turbotax (2) If a partnership described in section 4. Free 2010 turbotax 12(1) of this revenue procedure receives a statement described in sections 4. Free 2010 turbotax 07(2) or 4. Free 2010 turbotax 10(3) of this revenue procedure or this section 4. Free 2010 turbotax 12(2), it must provide each of its partners a statement containing the partner’s share of each of the items listed on each statement received by the partnership, including the information described in section 4. Free 2010 turbotax 07(2)(b)(x) of this revenue procedure. Free 2010 turbotax If an S corporation receives a statement described in sections 4. Free 2010 turbotax 07(2) or 4. Free 2010 turbotax 10(3) of this revenue procedure or this section 4. Free 2010 turbotax 12(2), it must provide each of its shareholders a statement containing the shareholder’s share of each of the items listed on each statement received by the S corporation that are described in section 4. Free 2010 turbotax 07(2)(b)(i), (ii), (iii), (iv) and (ix) of this revenue procedure. Free 2010 turbotax The partnership or S corporation must attach this statement or statements to the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) that it provides to each of its partners or shareholders, as the case may be, for the taxable year of the partnership or S corporation. Free 2010 turbotax The partnership or S corporation should not attach these statements to the Schedules K-1 that are filed with the Service but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. Free 2010 turbotax (3) A partnership that receives a statement described in this section 4 identifying its COD income amount with respect to an applicable debt instrument must allocate its COD income amount, without regard to § 108(i), to the partners in the partnership immediately before the reacquisition transaction in the manner in which the income would be included in the distributive shares of these partners under § 704 and the regulations thereunder, including § 1. Free 2010 turbotax 704-1(b)(2)(iii). Free 2010 turbotax The partnership may determine in any manner the portion, if any, of a partner’s COD income amount that is the partner’s deferred amount and the portion, if any, of a partner’s COD income amount that is the partner’s included amount. Free 2010 turbotax No partner’s deferred amount with respect to an applicable debt instrument may exceed its COD income amount with respect to the applicable debt instrument, and the aggregate of deferred amounts of its partners with respect to an applicable debt instrument must equal the partnership’s deferred amount with respect to the applicable debt instrument. Free 2010 turbotax The partnership allocates amounts described in section 4. Free 2010 turbotax 06 of this revenue procedure under this section 4. Free 2010 turbotax 12(3) as if the additional COD income was realized. Free 2010 turbotax (4) The deferred § 752 amount for partners in a partnership making a § 108(i) election is calculated only for the partnership’s direct partners. Free 2010 turbotax No further adjustment to the deferred § 752 amount is made to reflect the basis or other attributes of partners that are indirect partners in the partnership. Free 2010 turbotax (5) If an S corporation receives a statement described in this section 4 identifying its COD income amount, deferred amount, included amount or additional COD income that would be deferred with respect to an applicable debt instrument, these amounts are shared pro rata only among those shareholders that are shareholders in the S corporation immediately before the reacquisition transaction. Free 2010 turbotax (6) This paragraph 4. Free 2010 turbotax 12(6) provides the rules for Category 1 and Category 2 filers of Form 8865, Return of U. Free 2010 turbotax S. Free 2010 turbotax Persons With Respect to Certain Foreign Partnerships, as defined in the instructions for Form 8865, if the foreign partnership, for which the Category 1 or Category 2 filer has a filing requirement, receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting the partnership’s share of any items listed in section 4. Free 2010 turbotax 07(1) of this revenue procedure, or a statement described in sections 4. Free 2010 turbotax 07(2) or 4. Free 2010 turbotax 10(3) of this revenue procedure (because the foreign partnership owns an interest directly or indirectly in another partnership in which an election was made under § 108(i) with respect to that foreign partnership’s distributive share from the other entity). Free 2010 turbotax (a) For each partner for whom the Category 1 filer is required to complete a Schedule K-1 (Form 8865) (which includes the Category 1 filer itself), the Category 1 filer must: (i) Include the information described in section 4. Free 2010 turbotax 07(1) of this revenue procedure in the Schedule K-1 (Form 8865) that the Category 1 filer files with the Service and completes for the partner; (ii) Produce a statement containing the partner’s share of the items listed on each statement received by the partnership; and (iii) Attach the statement described in section 4. Free 2010 turbotax 12(6)(a)(ii) of this revenue procedure to each Schedule K-1 (Form 8865) that it is required to provide to a partner of the foreign partnership. Free 2010 turbotax (b) A Category 2 filer must include its share of the information described in section 4. Free 2010 turbotax 07(1) on the Schedule K-1 (Form 8865) that it is required to complete. Free 2010 turbotax Category 2 filers also must complete a statement containing their share of the items listed on each statement received by the partnership. Free 2010 turbotax (c) The Category 1 and Category 2 filers should not attach the statements described in sections 4. Free 2010 turbotax 12(6)(a)(ii) and 4. Free 2010 turbotax 12(6)(b) of this revenue procedure, respectively, to the Schedules K-1 that are filed with the Service. Free 2010 turbotax However, Category 1 filers must retain the statements they complete and each partner must retain its own statement, in their respective books and records. Free 2010 turbotax (7) If as a result of § 108(i)(5)(D)(ii), a partner of a partnership described in section 4. Free 2010 turbotax 12(1) of this revenue procedure or a shareholder of an S corporation described in section 4. Free 2010 turbotax 12(1) of this revenue procedure must recognize items deferred under § 108(i), the partnership or S corporation must report these items on the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) and statements provided to the partner or shareholder pursuant to section 4. Free 2010 turbotax 12(1) and (2) of this revenue procedure. Free 2010 turbotax Similar rules apply to Category 1 and Category 2 filers (Form 8865) described in section 4. Free 2010 turbotax 12(6) of this revenue procedure. Free 2010 turbotax (8) The provisions of section 4. Free 2010 turbotax 12(2), (3), (5) and (6) of this revenue procedure also apply to a statement received that is described in section 4. Free 2010 turbotax 11(2) of this revenue procedure, except that the information that must be provided are those items described in section 4. Free 2010 turbotax 11(1)(b) of this revenue procedure (an S corporation need not provide its shareholders with the date(s) of the transaction(s) that would constitute the reacquisition transaction or transactions) and the share of the partner or shareholder in the amounts described in section 4. Free 2010 turbotax 11(1)(d) of this revenue procedure. Free 2010 turbotax SECTION 5. Free 2010 turbotax REQUIRED INFORMATION STATEMENT . Free 2010 turbotax 01 Annual Information Statements. Free 2010 turbotax Pursuant to § 108(i)(7)(B), a taxpayer that makes an election under § 108(i) (except for a protective election under section 4. Free 2010 turbotax 11(1) of this revenue procedure) must attach a statement meeting the requirements of section 5. Free 2010 turbotax 02 of this revenue procedure to its federal income tax return for each taxable year beginning with the taxable year following the taxable year for which the taxpayer makes the election and ending with the first taxable year in which all items deferred under § 108(i) have been recognized. Free 2010 turbotax . Free 2010 turbotax 02 Contents of Statement. Free 2010 turbotax A statement meets the requirements of this section 5. Free 2010 turbotax 02 if the statement— (1) Label. Free 2010 turbotax States “Section 108(i) Information Statement” across the top; (2) Required information. Free 2010 turbotax Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies— (a) COD income deferred under § 108(i) that is included in income in the current taxable year under § 108(i)(1); (b) COD income deferred under § 108(i) that is included in income in the current taxable year under § 108(i)(5)(D), including a description and date of the acceleration event described in § 108(i)(5)(D); (c) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years (in the case of a partnership, the aggregate of the partners’ deferred amounts that have not been included in income in the current or prior taxable years, and in the case of an S corporation, the S corporation’s COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years); (d) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (e) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D); and (f) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years. Free 2010 turbotax (3) Election attached. Free 2010 turbotax Includes a copy of the election statement described in section 4. Free 2010 turbotax 05 of this revenue procedure. Free 2010 turbotax . Free 2010 turbotax 03 Additional Annual Reporting Requirements for Certain Partnerships. Free 2010 turbotax The rules of this section 5. Free 2010 turbotax 03 apply to partnerships other than partnerships described in section 5. Free 2010 turbotax 05 of this revenue procedure. Free 2010 turbotax (1) In general. Free 2010 turbotax A partnership that makes an election under § 108(i) (except for a protective election under section 4. Free 2010 turbotax 11(1) of this revenue procedure) must attach to its federal income tax returns the statements required under section 5. Free 2010 turbotax 01 of this revenue procedure. Free 2010 turbotax In addition, for each taxable year in which a statement is required under section 5. Free 2010 turbotax 01 of this revenue procedure, the partnership must report on the Schedule K-1 (Form 1065 or Form 1065-B) for each partner § 108(i) information in the manner described in section 4. Free 2010 turbotax 07(1) of this revenue procedure. Free 2010 turbotax (2) Annual information statements provided to partners. Free 2010 turbotax The partnership must attach to the Schedule K-1 (Form 1065) provided to each partner for each taxable year in which a statement is required under section 5. Free 2010 turbotax 01 of this revenue procedure, a statement meeting the requirements of this section 5. Free 2010 turbotax 03(2). Free 2010 turbotax The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner must retain that partner’s statement, in their respective books and records. Free 2010 turbotax A statement meets the requirements of this section 5. Free 2010 turbotax 03(2) if the statement— (a) Label. Free 2010 turbotax States “Section 108(i) Annual Information Statement for Partners” across the top of the statement. Free 2010 turbotax (b) Required information. Free 2010 turbotax Clearly identifies for each applicable debt instrument to which a § 108(i) election applies— (i) The partner’s deferred amount that has not been included in income as of the end of the prior taxable year; (ii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(1); (iii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iv) The partner’s deferred amount that has not been included in income in the current or prior taxable years; (v) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (vi) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (vii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); (viii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years; and (ix) The partner’s deferred § 752 amount that is treated as a distribution of money to the partner under § 752 in the current taxable year and any remaining deferred § 752 amount. Free 2010 turbotax If a partner fails to provide the written statement required by section 4. Free 2010 turbotax 07(3) of this revenue procedure, the partnership must indicate that the amounts described in this section 5. Free 2010 turbotax 03(2)(b)(ix) cannot be calculated because the partner did not provide the information necessary to report these amounts. Free 2010 turbotax . Free 2010 turbotax 04 Additional Annual Reporting Requirements for an S Corporation. Free 2010 turbotax (1) In general. Free 2010 turbotax An S corporation that makes an election under § 108(i) (except for a protective election under section 4. Free 2010 turbotax 11(1) of this revenue procedure) must attach to its federal income tax returns the statements required under section 5. Free 2010 turbotax 01 of this revenue procedure. Free 2010 turbotax In addition, for each taxable year in which a statement is required under section 5. Free 2010 turbotax 01 of this revenue procedure, the S corporation must report on the Schedule K-1 (Form 1120S) for each shareholder § 108(i) information in the manner described in section 4. Free 2010 turbotax 08(1) of this revenue procedure. Free 2010 turbotax (2) Annual information statements provided to shareholders. Free 2010 turbotax The S corporation must attach to the Schedule K-1 (Form 1120S) provided to each shareholder for each taxable year in which a statement is required under section 5. Free 2010 turbotax 01 of this revenue procedure a statement meeting the requirements of this section 5. Free 2010 turbotax 04(2). Free 2010 turbotax The S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each shareholder must retain that shareholder’s statement, in their respective books and records. Free 2010 turbotax A statement meets the requirements of this section 5. Free 2010 turbotax 04(2) if the statement— (a) Label. Free 2010 turbotax States “Section 108(i) Annual Information Statement for Shareholders” across the top; (b) Required information. Free 2010 turbotax Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies, the shareholder’s share of the S corporation’s— (i) COD income deferred under § 108(i) that has not been included in income as of the end of the prior taxable year; (ii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(1); (iii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iv) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years; (v) OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (vi) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (vii) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); and (viii) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years. Free 2010 turbotax . Free 2010 turbotax 05 Additional Annual Reporting Requirements for Certain Foreign Partnerships. Free 2010 turbotax (1) The rules of this section 5. Free 2010 turbotax 05 apply to nonfiling foreign partnerships. Free 2010 turbotax (2) A nonfiling foreign partnership that makes an election under § 108(i) (except for a protective election under section 4. Free 2010 turbotax 11(1) of this revenue procedure) must file federal income tax returns with the Service containing the information under § 1. Free 2010 turbotax 6031(a)-1(b)(5) for each taxable year in which a statement is required by section 5. Free 2010 turbotax 01 of this revenue procedure. Free 2010 turbotax (3) The nonfiling foreign partnership must attach to its federal income tax returns the statements required under section 5. Free 2010 turbotax 01 of this revenue procedure, but only for that portion of the COD income allocated to affected partners. Free 2010 turbotax (4) For each taxable year in which a statement is required under section 5. Free 2010 turbotax 01 of this revenue procedure, the nonfiling foreign partnership must provide each affected partner a Schedule K-1 (Form 1065) reporting § 108(i) information in the manner described in section 4. Free 2010 turbotax 07(1) of this revenue procedure. Free 2010 turbotax Except for this § 108(i) information, the partnership need not complete Part III of the Schedule K-1 (Form 1065). Free 2010 turbotax The partnership must provide each affected partner with a copy of the Schedule K-1 (Form 1065) by the date provided in § 1. Free 2010 turbotax 6031(b)-1T(b). Free 2010 turbotax The partnership must attach the Schedules K-1 (Form 1065) to the federal income tax returns filed with the Service pursuant to section 5. Free 2010 turbotax 05(2) of this revenue procedure. Free 2010 turbotax (5) For each taxable year for which a statement is required under section 5. Free 2010 turbotax 01 of this revenue procedure, the nonfiling foreign partnership must attach to each affected partner’s Schedule K-1 (Form 1065) a statement meeting the requirements of section 5. Free 2010 turbotax 03(2) of this revenue procedure. Free 2010 turbotax The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain the statements, and each partner must retain that partner’s statement, in their respective books and records. Free 2010 turbotax . Free 2010 turbotax 06 Information Statements Made on Behalf of Certain Foreign Corporations. Free 2010 turbotax Each controlling domestic shareholder must attach a statement identifying the foreign corporation and meeting the requirements of section 5. Free 2010 turbotax 02 of this revenue procedure to the shareholder’s federal income tax return for each taxable year for which a statement is required under section 5. Free 2010 turbotax 01 of this revenue procedure. Free 2010 turbotax . Free 2010 turbotax 07 Additional Annual Reporting Requirements for Tiered Pass-Through Entities. Free 2010 turbotax (1) A partnership required to file a U. Free 2010 turbotax S. Free 2010 turbotax partnership return other than under § 1. Free 2010 turbotax 6031(a)-1(b)(5), or an S corporation, that receives a Schedule K-1 (Form 1065 or Form 1065-B) described in the second sentence of section 5. Free 2010 turbotax 03(1) of this revenue procedure reflecting its share of any § 108(i) information must report on the Schedules K-1 (Form 1065, Form 1065-B, or Form 1120S) to its partners or shareholders, as the case may be, each partner’s or shareholder’s share of those items (an S corporation only reports to its shareholders the items described in section 4. Free 2010 turbotax 07(1)(a) through (d) of this revenue procedure). Free 2010 turbotax (2) If a partnership described in section 5. Free 2010 turbotax 07(1) of this revenue procedure receives a statement described in sections 5. Free 2010 turbotax 03(2) or 5. Free 2010 turbotax 05(5) of this revenue procedure or this section 5. Free 2010 turbotax 07(2), it must provide each of its partners a statement containing the partner’s share of each of the items listed on each statement received by the partnership. Free 2010 turbotax If an S corporation receives a statement described in sections 5. Free 2010 turbotax 03(2) or 5. Free 2010 turbotax 05(5) of this revenue procedure or this section 5. Free 2010 turbotax 07(2), it must provide each of its shareholders a statement containing the shareholder’s share of each of the items listed on each statement received by the S corporation that are described in section 5. Free 2010 turbotax 03(2)(b)(i) through (viii) of this revenue procedure. Free 2010 turbotax The partnership or S corporation must attach the statement or statements to the Schedule K-1 (Form 1065 or Form 1065-B) or Schedule K-1 (Form 1120S) that is provided to each of its partners or shareholders, as the case may be, for the taxable year of the partnership or S corporation. Free 2010 turbotax The partnership or S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. Free 2010 turbotax (3) This paragraph 5. Free 2010 turbotax 07(3) provides the rules for persons described in section 4. Free 2010 turbotax 12(6) of this revenue procedure if the foreign partnership, for which the Category 1 or 2 filer has a filing requirement, receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting the partnership’s share of any items described in the second sentence of section 5. Free 2010 turbotax 03(1) of this revenue procedure, or a statement described in sections 5. Free 2010 turbotax 03(2) or 5. Free 2010 turbotax 05(5) of this revenue procedure (because the foreign partnership owns an interest directly or indirectly in another partnership in which an election was made under § 108(i) with respect to that foreign partnership’s distributive share from the other entity). Free 2010 turbotax (a) For each partner for whom the Category 1 filer is required to complete a Schedule K-1 (Form 8865) (which includes the Category 1 filer itself), the Category 1 filer must: (i) Include the information described in section 4. Free 2010 turbotax 07(1) of this revenue procedure in the Schedule K-1 (Form 8865) that the Category 1 filer files with the Service and completes for the partner; (ii) Produce a statement containing the partner’s share of the items listed on each statement received by the partnership; and (iii) Attach the statement described in section 5. Free 2010 turbotax 07(3)(a)(ii) of this revenue procedure to each Schedule K-1 (Form 8865) that it is required to provide to a partner of the foreign partnership. Free 2010 turbotax (b) A Category 2 filer must include its share of the information described in section 4. Free 2010 turbotax 07(1) on the Schedule K-1 (Form 8865) that it is required to complete. Free 2010 turbotax Category 2 filers also must complete a statement containing their share of the items listed on each statement received by the partnership. Free 2010 turbotax (c) The Category 1 and Category 2 filers should not attach the statements described in sections 5. Free 2010 turbotax 07(3)(a)(ii) and 5. Free 2010 turbotax 07(3)(b) of this revenue procedure, respectively, to the Schedules K-1 that are filed with the Service. Free 2010 turbotax However, Category 1 filers must retain the statements they complete and each partner must retain its own statement, in their respective books and records. Free 2010 turbotax (4) If as a result of § 108(i)(5)(D)(ii), a partner of a partnership described in section 5. Free 2010 turbotax 07(1) of this revenue procedure or a shareholder of an S corporation described in section 5. Free 2010 turbotax 07(1) of this revenue procedure must recognize items deferred under § 108(i), the partnership or S corporation must report these items on the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) and statements provided to the partner or shareholder pursuant to section 5. Free 2010 turbotax 07(1) and (2) of this revenue procedure. Free 2010 turbotax Similar rules apply to Category 1 and Category 2 filers (Form 8865) described in section 4. Free 2010 turbotax 12(6) of this revenue procedure. Free 2010 turbotax SECTION 6. Free 2010 turbotax EFFECTIVE DATE This revenue procedure is effective for reacquisitions of applicable debt instruments in taxable years ending after December 31, 2008. Free 2010 turbotax SECTION 7. Free 2010 turbotax TRANSITION RULE . Free 2010 turbotax 01 Noncomplying Election. Free 2010 turbotax Except as otherwise provided in this section 7. Free 2010 turbotax 01, the Service will treat a § 108(i) election as effective if a taxpayer files an election with the taxpayer’s federal income tax return filed on or before September 16, 2009, using any reasonable procedure to make the election. Free 2010 turbotax However, an election that does not comply with section 4 of this revenue procedure will not be effective unless the taxpayer on or before November 16, 2009, files an amended return for the taxable year of the election and complies with the requirements of section 4 of this revenue procedure. Free 2010 turbotax . Free 2010 turbotax 02 Modification of Election. Free 2010 turbotax A taxpayer that files a § 108(i) election on or before September 16, 2009, may modify that election by filing an amended return on or before November 16, 2009 (for example, to modify the amount of COD income the taxpayer elects to defer). Free 2010 turbotax To be effective, a modification of an election described in the preceding sentence must satisfy the requirements for an election described in section 4 of this revenue procedure. Free 2010 turbotax . Free 2010 turbotax 03 Notations. Free 2010 turbotax A taxpayer that files the amended return on paper must write “Section 108(i) Election” on the top of the first page. Free 2010 turbotax A taxpayer that files the amended return electronically should indicate “Section 108(i) Election” on the return. Free 2010 turbotax See Publication 4163, Modernized e-File (MeF) Information for Authorized IRS e-file Providers for Business Returns Tax Year 2008 for more details. Free 2010 turbotax SECTION 8. Free 2010 turbotax PAPERWORK REDUCTION ACT The collection of information contained in this revenue procedure has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44 U. Free 2010 turbotax S. Free 2010 turbotax C. Free 2010 turbotax 3507) under control number 1545-2147. Free 2010 turbotax An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Free 2010 turbotax The collection of information in this revenue procedure is in sections 4, 5 and 7. Free 2010 turbotax This information is required to determine the amount of income and deductions a taxpayer elects to defer and to track those amounts until the taxpayer has reported all deferred income and deductions on the taxpayer’s tax return. Free 2010 turbotax This information will be used during examination to verify that a taxpayer has correctly deferred income and deductions. Free 2010 turbotax The collection of information is required to obtain a benefit. Free 2010 turbotax The likely respondents are C corporations, shareholders of S corporations, partners of partnerships, and other individuals engaged in a trade or business, that reacquire applicable debt instruments in 2009 or 2010. Free 2010 turbotax The estimated total annual reporting burden is 300,000 hours. Free 2010 turbotax The estimated annual burden per respondent varies from 1 to 8 hours, depending on individual circumstances, with an estimated average of 6 hours. Free 2010 turbotax The estimated number of respondents is 50,000. Free 2010 turbotax Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Free 2010 turbotax Generally, tax returns and return information are confidential, as required by § 6103. Free 2010 turbotax DRAFTING INFORMATION The principal authors of this revenue procedure are Megan A. Free 2010 turbotax Stoner of the Office of Associate Chief Counsel (Passthroughs & Special Industries) and Craig Wojay of the Office of Associate Chief Counsel (Income Tax & Accounting). Free 2010 turbotax For further information regarding this revenue procedure, contact Megan A. Free 2010 turbotax Stoner at (202) 622-3070 for questions involving partnerships and S corporations, William E. Free 2010 turbotax Blanchard at (202) 622-3950 for questions involving OID, Ronald M. Free 2010 turbotax Gootzeit at (202) 622-3860 for questions involving foreign entities, Robert Rhyne at (202) 622-7790 for questions involving earnings and profits and consolidated groups, and Craig Wojay at (202) 622-4920 for questions on § 108(i) generally (not toll-free calls). Free 2010 turbotax Prev  Up  Next   Home   More Internal Revenue Bulletins