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How To Fill Out A 1040x Tax Amendment Form

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How To Fill Out A 1040x Tax Amendment Form

How to fill out a 1040x tax amendment form Publication 54 - Introductory Material Table of Contents Future Developments What's New Reminders IntroductionOrdering forms and publications. How to fill out a 1040x tax amendment form Tax questions. How to fill out a 1040x tax amendment form Future Developments For the latest information about developments related to Publication 54, such as legislation enacted after it was published, go to www. How to fill out a 1040x tax amendment form irs. How to fill out a 1040x tax amendment form gov/pub54. How to fill out a 1040x tax amendment form What's New Exclusion amount. How to fill out a 1040x tax amendment form  The maximum foreign earned income exclusion is adjusted annually for inflation. How to fill out a 1040x tax amendment form For 2013, the maximum exclusion has increased to $97,600. How to fill out a 1040x tax amendment form See Limit on Excludable Amount under Foreign Earned Income Exclusion in chapter 4. How to fill out a 1040x tax amendment form Housing expenses — base amount. How to fill out a 1040x tax amendment form  The computation of the base housing amount (line 32 of Form 2555) is tied to the maximum foreign earned income exclusion. How to fill out a 1040x tax amendment form The amount is 16 percent of the exclusion amount (computed on a daily basis), multiplied by the number of days in your qualifying period that fall within your 2013 tax year. How to fill out a 1040x tax amendment form For 2013, this amount is $42. How to fill out a 1040x tax amendment form 78 per day ($15,616 per year). How to fill out a 1040x tax amendment form See Housing Amount under Foreign Housing Exclusion and Deduction in chapter 4. How to fill out a 1040x tax amendment form Housing expenses — maximum amount. How to fill out a 1040x tax amendment form  The amount of qualified housing expenses eligible for the housing exclusion and housing deduction has changed for some locations. How to fill out a 1040x tax amendment form See Limit on housing expenses under Foreign Housing Exclusion and Deduction in chapter 4. How to fill out a 1040x tax amendment form Filing requirements. How to fill out a 1040x tax amendment form  Generally, the amount of income you can receive before you must file an income tax return has increased. How to fill out a 1040x tax amendment form These amounts are shown in chapter 1 under Filing Requirements . How to fill out a 1040x tax amendment form Self-employment tax rate. How to fill out a 1040x tax amendment form  For 2013, the self-employment tax rate of 13. How to fill out a 1040x tax amendment form 3% has increased to 15. How to fill out a 1040x tax amendment form 3%. How to fill out a 1040x tax amendment form The maximum amount of net earnings from self-employment that is subject to the social security part of the self-employment tax has increased to $113,700. How to fill out a 1040x tax amendment form All net earnings are subject to the Medicare part of the tax. How to fill out a 1040x tax amendment form For more information, see chapter 3. How to fill out a 1040x tax amendment form IRA limitations for 2013. How to fill out a 1040x tax amendment form . How to fill out a 1040x tax amendment form  The 2013 contribution limit to an IRA has increased to $5,500 ($6,500 if age 50 or older). How to fill out a 1040x tax amendment form You may be able to take an IRA deduction if you were covered by a retirement plan and your 2013 modified adjusted gross income (AGI) is less than $69,000 ($115,000 if married filing jointly or a qualifying widow(er)). How to fill out a 1040x tax amendment form If your spouse was covered by a retirement plan, but you were not, you may be able to take an IRA deduction if your 2013 modified AGI is less than $188,000. How to fill out a 1040x tax amendment form See the Instructions for Form 1040 or the Instructions for Form 1040A for details and exceptions. How to fill out a 1040x tax amendment form Reminders Figuring tax on income not excluded. How to fill out a 1040x tax amendment form  If you claim the foreign earned income exclusion, the housing exclusion, or both, you must figure the tax on your nonexcluded income using the tax rates that would have applied had you not claimed the exclusions. How to fill out a 1040x tax amendment form See the Instructions for Form 1040 and complete the Foreign Earned Income Tax Worksheet to figure the amount of tax to enter on Form 1040, line 44. How to fill out a 1040x tax amendment form If you must attach Form 6251 to your return, use the Foreign Earned Income Tax Worksheet provided in the Instructions for Form 6251. How to fill out a 1040x tax amendment form Form 8938. How to fill out a 1040x tax amendment form  If you had foreign financial assets in 2013, you may have to file Form 8938 with your return. How to fill out a 1040x tax amendment form See Form 8938 in chapter 1. How to fill out a 1040x tax amendment form Change of address. How to fill out a 1040x tax amendment form  If you change your home mailing address, notify the Internal Revenue Service using Form 8822, Change of Address. How to fill out a 1040x tax amendment form If you are changing your business address, use Form 8822-B, Change of Address or Responsible Party—Business. How to fill out a 1040x tax amendment form Photographs of missing children. How to fill out a 1040x tax amendment form  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. How to fill out a 1040x tax amendment form Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. How to fill out a 1040x tax amendment form You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. How to fill out a 1040x tax amendment form Introduction This publication discusses special tax rules for U. How to fill out a 1040x tax amendment form S. How to fill out a 1040x tax amendment form citizens and resident aliens who work abroad or who have income earned in foreign countries. How to fill out a 1040x tax amendment form If you are a U. How to fill out a 1040x tax amendment form S. How to fill out a 1040x tax amendment form citizen or resident alien, your worldwide income generally is subject to U. How to fill out a 1040x tax amendment form S. How to fill out a 1040x tax amendment form income tax, regardless of where you are living. How to fill out a 1040x tax amendment form Also, you are subject to the same income tax filing requirements that apply to U. How to fill out a 1040x tax amendment form S. How to fill out a 1040x tax amendment form citizens or resident aliens living in the United States. How to fill out a 1040x tax amendment form Expatriation tax provisions apply to U. How to fill out a 1040x tax amendment form S. How to fill out a 1040x tax amendment form citizens who have renounced their citizenship and long-term residents who have ended their residency. How to fill out a 1040x tax amendment form These provisions are discussed in chapter 4 of Publication 519, U. How to fill out a 1040x tax amendment form S. How to fill out a 1040x tax amendment form Tax Guide for Aliens. How to fill out a 1040x tax amendment form Resident alien. How to fill out a 1040x tax amendment form   A resident alien is an individual who is not a citizen or national of the United States and who meets either the green card test or the substantial presence test for the calendar year. How to fill out a 1040x tax amendment form Green card test. How to fill out a 1040x tax amendment form You are a U. How to fill out a 1040x tax amendment form S. How to fill out a 1040x tax amendment form resident if you were a lawful permanent resident of the United States at any time during the calendar year. How to fill out a 1040x tax amendment form This is known as the green card test because resident aliens hold immigrant visas (also known as green cards). How to fill out a 1040x tax amendment form Substantial presence test. How to fill out a 1040x tax amendment form You are considered a U. How to fill out a 1040x tax amendment form S. How to fill out a 1040x tax amendment form resident if you meet the substantial presence test for the calendar year. How to fill out a 1040x tax amendment form To meet this test, you must be physically present in the United States on at least: 31 days during the current calendar year, and A total of 183 days during the current year and the 2 preceding years, counting all the days of physical presence in the current year, but only 1/3 the number of days of presence in the first preceding year, and only 1/6 the number of days in the second preceding year. How to fill out a 1040x tax amendment form Example. How to fill out a 1040x tax amendment form You were physically present in the United States on 120 days in each of the years 2011, 2012, and 2013. How to fill out a 1040x tax amendment form To determine if you meet the substantial presence test for 2013, count the full 120 days of presence in 2013, 40 days in 2012 (1/3 of 120), and 20 days in 2011 (1/6 of 120). How to fill out a 1040x tax amendment form Because the total for the 3-year period is 180 days, you are not considered a resident under the substantial presence test for 2013. How to fill out a 1040x tax amendment form   For more information on resident and nonresident status, the tests for residence, and the exceptions to them, see Publication 519. How to fill out a 1040x tax amendment form Filing information. How to fill out a 1040x tax amendment form    Chapter 1 contains general filing information, such as: Whether you must file a U. How to fill out a 1040x tax amendment form S. How to fill out a 1040x tax amendment form tax return, When and where to file your return, How to report your income if it is paid in foreign currency, How to treat a nonresident alien spouse as a U. How to fill out a 1040x tax amendment form S. How to fill out a 1040x tax amendment form resident, and Whether you must pay estimated tax. How to fill out a 1040x tax amendment form Withholding tax. How to fill out a 1040x tax amendment form    Chapter 2 discusses the withholding of income, social security, and Medicare taxes from the pay of U. How to fill out a 1040x tax amendment form S. How to fill out a 1040x tax amendment form citizens and resident aliens. How to fill out a 1040x tax amendment form Self-employment tax. How to fill out a 1040x tax amendment form    Chapter 3 discusses who must pay self-employment tax. How to fill out a 1040x tax amendment form Foreign earned income exclusion and housing exclusion and deduction. How to fill out a 1040x tax amendment form    Chapter 4 discusses income tax benefits that apply if you meet certain requirements while living abroad. How to fill out a 1040x tax amendment form You may qualify to treat up to $97,600 of your income as not taxable by the United States. How to fill out a 1040x tax amendment form You also may be able to either deduct part of your housing expenses from your income or treat a limited amount of income used for housing expenses as not taxable by the United States. How to fill out a 1040x tax amendment form These benefits are called the foreign earned income exclusion and the foreign housing deduction and exclusion. How to fill out a 1040x tax amendment form   To qualify for either of the exclusions or the deduction, you must have a tax home in a foreign country and earn income from personal services performed in a foreign country. How to fill out a 1040x tax amendment form These rules are explained in chapter 4. How to fill out a 1040x tax amendment form   If you are going to exclude or deduct your income as discussed above, you must file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion. How to fill out a 1040x tax amendment form Exemptions, deductions, and credits. How to fill out a 1040x tax amendment form    Chapter 5 discusses exemptions, deductions, and credits you may be able to claim on your return. How to fill out a 1040x tax amendment form These are generally the same as if you were living in the United States. How to fill out a 1040x tax amendment form However, if you choose to exclude foreign earned income or housing amounts, you cannot deduct or exclude any item or take a credit for any item that is related to the amounts you exclude. How to fill out a 1040x tax amendment form Among the topics discussed in chapter 5 are: Exemptions, Contributions to foreign organizations, Foreign moving expenses, Contributions to individual retirement arrangements (IRAs), and Foreign taxes. How to fill out a 1040x tax amendment form Tax treaty benefits. How to fill out a 1040x tax amendment form    Chapter 6 discusses some benefits that are common to most tax treaties and explains how to get help if you think you are not receiving a treaty benefit to which you are entitled. How to fill out a 1040x tax amendment form It also explains how to get copies of tax treaties. How to fill out a 1040x tax amendment form How to get tax help. How to fill out a 1040x tax amendment form    Chapter 7 is an explanation of how to get information and assistance from the IRS. How to fill out a 1040x tax amendment form Questions and answers. How to fill out a 1040x tax amendment form   Frequently asked questions and answers to those questions are presented in the back of the publication. How to fill out a 1040x tax amendment form Comments and suggestions. How to fill out a 1040x tax amendment form   We welcome your comments about this publication and your suggestions for future editions. How to fill out a 1040x tax amendment form   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. How to fill out a 1040x tax amendment form NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. How to fill out a 1040x tax amendment form Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. How to fill out a 1040x tax amendment form   You can send us comments from www. How to fill out a 1040x tax amendment form irs. How to fill out a 1040x tax amendment form gov/formspubs/. How to fill out a 1040x tax amendment form Click on “More Information” and then on “Comment on Tax Forms and Publications. How to fill out a 1040x tax amendment form ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. How to fill out a 1040x tax amendment form Ordering forms and publications. How to fill out a 1040x tax amendment form   Visit www. How to fill out a 1040x tax amendment form irs. How to fill out a 1040x tax amendment form gov/formspubs/ to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response within 10 days after your request is received. How to fill out a 1040x tax amendment form Internal Revenue Service 1201 N. How to fill out a 1040x tax amendment form Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. How to fill out a 1040x tax amendment form   If you have a tax question, check the information available on IRS. How to fill out a 1040x tax amendment form gov or call 1-800-TAX–FORM (1-800-829-1040). How to fill out a 1040x tax amendment form We cannot answer tax questions sent to either of the above addresses. How to fill out a 1040x tax amendment form Prev  Up  Next   Home   More Online Publications
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EFTPS: The Electronic Federal Tax Payment System

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The Easiest Way to Pay All Your Federal Taxes

EFTPS® is a system for paying federal taxes electronically using the Internet, or by phone using the EFTPS® Voice Response System. EFTPS® is offered free by the U.S. Department of Treasury. Over 12 million taxpayers are currently enrolled in the system. Since EFTPS® began in 1996, there have been over 1.45 billion electronic payments made, totaling over $29.5 trillion!
 


EFTPS® offers ...

  • Security
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  • Accuracy

Security You Can Count On

EFTPS® is a secure government web site that allows users to make federal tax payments electronically. Every user must have a secure Internet browser with 128-bit encryption in order to access the site. To log on to the system, an enrolled user must be authenticated with three pieces of unique information: Taxpayer Identification Number (EIN or SSN), EFTPS® Personal Identification Number (PIN) and an Internet Password. The combination of these three pieces of identification adds to the security of the site and the privacy of taxpayer data.

Convenience at Your Fingertips

  • EFTPS® offers you the convenience and flexibility of making your tax payments via the Internet or phone. You can initiate your tax payment from your home or office, 24/7.

  • Businesses and Individuals can schedule payments up to 365 days in advance. Scheduled payments can be changed or cancelled up to two business days in advance of the scheduled payment date.

  • You can use EFTPS® to make all your federal tax payments, including income, employment, estimated and excise taxes.

  • You can check up to 16 months of your EFTPS® payment history online or by calling EFTPS® Customer Service.

Accuracy You Can Depend On

By 8 p.m. ET at least one calendar day in advance of the due date, submit your payment instructions to EFTPS® to move the funds from your account to the Treasury's account for payment of your federal taxes. Funds will not move from your account until the date you indicate. You will receive an immediate acknowledgement of your payment instructions, and your bank statement will confirm the payment was made. 

EFTPS® Enrollment

To enroll, or for more information on enrollment, visit EFTPS® or call EFTPS® Customer Service to request an enrollment form:

  • 1-800-555-4477 
  • 1-800-733-4829 (TDD Hearing-Impaired)
  • 1-800-244-4829 (Español)

EFTPS Inquiry PIN

Beginning this year, when Payroll Service Providers enroll clients in EFTPS, an EFTPS Inquiry PIN will automatically be sent to the taxpayer.  Taxpayers who have had activity on their EFTPS account over the prior 12 months will also receive Inquiry PINs.  This Inquiry PIN allows the taxpayer access to monitor the EFTPS for transactions made on their behalf.

And there's more...

Tax professionals, accountants, and payroll companies are discovering the added benefits of using EFTPS®.

  • EFTPS® via the Internet or phone - Once enrolled, individual and business taxpayers can use the Internet to make all their federal tax payments via the Internet, or phone using the EFTPS® Voice Response System. Both payment methods are interchangeable. 

  • EFTPS® Batch Provider - Tax professionals/providers can register through this software and send up to 1,000 enrollments and 5,000 payments in one transaction. Users can synchronize enrollments and payments between the software and EFTPS® database in real-time. To download the EFTPS® Batch Provider Software and User's Manual visit EFTPS® and follow these steps:
  1. Click on HELP & INFORMATION
  2. Click on Downloads
  3. Click on Batch Provider Software User's Manual
  4. Click on Software (left side of screen) for additional information

  • EFTPS® Bulk Provider - Designed for payroll processors who initiate frequent payments from and desire automated enrollment through an Electronic Data Interchange (EDI) compatible system.

Additional Information is available in the articles below:

Publication 966 -  The Secure Way to Pay Your Federal Taxes for Businesses and Individuals

Publication 4990 - Tax Payment Instruction Booklet

Link for ordering free EFTPS® Marketing Materials

Electronic Payment Options Home Page

Current scams and phishing sites posing as the IRS

EFTPS® –  Treasury’s free service for paying federal taxes for individuals and businesses



 

Page Last Reviewed or Updated: 17-Mar-2014

The How To Fill Out A 1040x Tax Amendment Form

How to fill out a 1040x tax amendment form 13. How to fill out a 1040x tax amendment form   Basis of Property Table of Contents Introduction Useful Items - You may want to see: Cost BasisReal Property Adjusted BasisIncreases to Basis Decreases to Basis Basis Other Than CostProperty Received for Services Taxable Exchanges Involuntary Conversions Nontaxable Exchanges Property Transferred From a Spouse Property Received as a Gift Inherited Property Property Changed From Personal to Business or Rental Use Stocks and Bonds Introduction This chapter discusses how to figure your basis in property. How to fill out a 1040x tax amendment form It is divided into the following sections. How to fill out a 1040x tax amendment form Cost basis. How to fill out a 1040x tax amendment form Adjusted basis. How to fill out a 1040x tax amendment form Basis other than cost. How to fill out a 1040x tax amendment form Your basis is the amount of your investment in property for tax purposes. How to fill out a 1040x tax amendment form Use the basis to figure gain or loss on the sale, exchange, or other disposition of property. How to fill out a 1040x tax amendment form Also use it to figure deductions for depreciation, amortization, depletion, and casualty losses. How to fill out a 1040x tax amendment form If you use property for both business or investment purposes and for personal purposes, you must allocate the basis based on the use. How to fill out a 1040x tax amendment form Only the basis allocated to the business or investment use of the property can be depreciated. How to fill out a 1040x tax amendment form Your original basis in property is adjusted (increased or decreased) by certain events. How to fill out a 1040x tax amendment form For example, if you make improvements to the property, increase your basis. How to fill out a 1040x tax amendment form If you take deductions for depreciation or casualty losses, or claim certain credits, reduce your basis. How to fill out a 1040x tax amendment form Keep accurate records of all items that affect the basis of your property. How to fill out a 1040x tax amendment form For more information on keeping records, see chapter 1. How to fill out a 1040x tax amendment form Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 525 Taxable and Nontaxable Income 535 Business Expenses 537 Installment Sales 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 551 Basis of Assets 946 How To Depreciate Property Cost Basis The basis of property you buy is usually its cost. How to fill out a 1040x tax amendment form The cost is the amount you pay in cash, debt obligations, other property, or services. How to fill out a 1040x tax amendment form Your cost also includes amounts you pay for the following items: Sales tax, Freight, Installation and testing, Excise taxes, Legal and accounting fees (when they must be capitalized), Revenue stamps, Recording fees, and Real estate taxes (if you assume liability for the seller). How to fill out a 1040x tax amendment form In addition, the basis of real estate and business assets may include other items. How to fill out a 1040x tax amendment form Loans with low or no interest. How to fill out a 1040x tax amendment form    If you buy property on a time-payment plan that charges little or no interest, the basis of your property is your stated purchase price minus any amount considered to be unstated interest. How to fill out a 1040x tax amendment form You generally have unstated interest if your interest rate is less than the applicable federal rate. How to fill out a 1040x tax amendment form   For more information, see Unstated Interest and Original Issue Discount (OID) in Publication 537. How to fill out a 1040x tax amendment form Real Property Real property, also called real estate, is land and generally anything built on, growing on, or attached to land. How to fill out a 1040x tax amendment form If you buy real property, certain fees and other expenses you pay are part of your cost basis in the property. How to fill out a 1040x tax amendment form Lump sum purchase. How to fill out a 1040x tax amendment form   If you buy buildings and the land on which they stand for a lump sum, allocate the cost basis among the land and the buildings. How to fill out a 1040x tax amendment form Allocate the cost basis according to the respective fair market values (FMVs) of the land and buildings at the time of purchase. How to fill out a 1040x tax amendment form Figure the basis of each asset by multiplying the lump sum by a fraction. How to fill out a 1040x tax amendment form The numerator is the FMV of that asset and the denominator is the FMV of the whole property at the time of purchase. How to fill out a 1040x tax amendment form    If you are not certain of the FMVs of the land and buildings, you can allocate the basis according to their assessed values for real estate tax purposes. How to fill out a 1040x tax amendment form Fair market value (FMV). How to fill out a 1040x tax amendment form   FMV is the price at which the property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the necessary facts. How to fill out a 1040x tax amendment form Sales of similar property on or about the same date may be helpful in figuring the FMV of the property. How to fill out a 1040x tax amendment form Assumption of mortgage. How to fill out a 1040x tax amendment form   If you buy property and assume (or buy the property subject to) an existing mortgage on the property, your basis includes the amount you pay for the property plus the amount to be paid on the mortgage. How to fill out a 1040x tax amendment form Settlement costs. How to fill out a 1040x tax amendment form   Your basis includes the settlement fees and closing costs you paid for buying the property. How to fill out a 1040x tax amendment form (A fee for buying property is a cost that must be paid even if you buy the property for cash. How to fill out a 1040x tax amendment form ) Do not include fees and costs for getting a loan on the property in your basis. How to fill out a 1040x tax amendment form   The following are some of the settlement fees or closing costs you can include in the basis of your property. How to fill out a 1040x tax amendment form Abstract fees (abstract of title fees). How to fill out a 1040x tax amendment form Charges for installing utility services. How to fill out a 1040x tax amendment form Legal fees (including fees for the title search and preparation of the sales contract and deed). How to fill out a 1040x tax amendment form Recording fees. How to fill out a 1040x tax amendment form Survey fees. How to fill out a 1040x tax amendment form Transfer taxes. How to fill out a 1040x tax amendment form Owner's title insurance. How to fill out a 1040x tax amendment form Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. How to fill out a 1040x tax amendment form   Settlement costs do not include amounts placed in escrow for the future payment of items such as taxes and insurance. How to fill out a 1040x tax amendment form   The following are some of the settlement fees and closing costs you cannot include in the basis of property. How to fill out a 1040x tax amendment form Casualty insurance premiums. How to fill out a 1040x tax amendment form Rent for occupancy of the property before closing. How to fill out a 1040x tax amendment form Charges for utilities or other services related to occupancy of the property before closing. How to fill out a 1040x tax amendment form Charges connected with getting a loan, such as points (discount points, loan origination fees), mortgage insurance premiums, loan assumption fees, cost of a credit report, and fees for an appraisal required by a lender. How to fill out a 1040x tax amendment form Fees for refinancing a mortgage. How to fill out a 1040x tax amendment form Real estate taxes. How to fill out a 1040x tax amendment form   If you pay real estate taxes the seller owed on real property you bought, and the seller did not reimburse you, treat those taxes as part of your basis. How to fill out a 1040x tax amendment form You cannot deduct them as an expense. How to fill out a 1040x tax amendment form    If you reimburse the seller for taxes the seller paid for you, you can usually deduct that amount as an expense in the year of purchase. How to fill out a 1040x tax amendment form Do not include that amount in the basis of your property. How to fill out a 1040x tax amendment form If you did not reimburse the seller, you must reduce your basis by the amount of those taxes. How to fill out a 1040x tax amendment form Points. How to fill out a 1040x tax amendment form   If you pay points to get a loan (including a mortgage, second mortgage, line of credit, or a home equity loan), do not add the points to the basis of the related property. How to fill out a 1040x tax amendment form Generally, you deduct the points over the term of the loan. How to fill out a 1040x tax amendment form For more information on how to deduct points, see chapter 23. How to fill out a 1040x tax amendment form Points on home mortgage. How to fill out a 1040x tax amendment form   Special rules may apply to points you and the seller pay when you get a mortgage to buy your main home. How to fill out a 1040x tax amendment form If certain requirements are met, you can deduct the points in full for the year in which they are paid. How to fill out a 1040x tax amendment form Reduce the basis of your home by any seller-paid points. How to fill out a 1040x tax amendment form Adjusted Basis Before figuring gain or loss on a sale, exchange, or other disposition of property or figuring allowable depreciation, depletion, or amortization, you must usually make certain adjustments (increases and decreases) to the cost basis or basis other than cost (discussed later) of the property. How to fill out a 1040x tax amendment form The result is the adjusted basis. How to fill out a 1040x tax amendment form Increases to Basis Increase the basis of any property by all items properly added to a capital account. How to fill out a 1040x tax amendment form Examples of items that increase basis are shown in Table 13-1. How to fill out a 1040x tax amendment form These include the items discussed below. How to fill out a 1040x tax amendment form Improvements. How to fill out a 1040x tax amendment form   Add to your basis in property the cost of improvements having a useful life of more than 1 year, that increase the value of the property, lengthen its life, or adapt it to a different use. How to fill out a 1040x tax amendment form For example, improvements include putting a recreation room in your unfinished basement, adding another bathroom or bedroom, putting up a fence, putting in new plumbing or wiring, installing a new roof, or paving your driveway. How to fill out a 1040x tax amendment form Assessments for local improvements. How to fill out a 1040x tax amendment form   Add to the basis of property assessments for improvements such as streets and sidewalks if they increase the value of the property assessed. How to fill out a 1040x tax amendment form Do not deduct them as taxes. How to fill out a 1040x tax amendment form However, you can deduct as taxes assessments for maintenance or repairs, or for meeting interest charges related to the improvements. How to fill out a 1040x tax amendment form Example. How to fill out a 1040x tax amendment form Your city changes the street in front of your store into an enclosed pedestrian mall and assesses you and other affected property owners for the cost of the conversion. How to fill out a 1040x tax amendment form Add the assessment to your property's basis. How to fill out a 1040x tax amendment form In this example, the assessment is a depreciable asset. How to fill out a 1040x tax amendment form Decreases to Basis Decrease the basis of any property by all items that represent a return of capital for the period during which you held the property. How to fill out a 1040x tax amendment form Examples of items that decrease basis are shown in Table 13-1. How to fill out a 1040x tax amendment form These include the items discussed below. How to fill out a 1040x tax amendment form Table 13-1. How to fill out a 1040x tax amendment form Examples of Adjustments to Basis Increases to Basis Decreases to Basis • Capital improvements: • Exclusion from income of   Putting an addition on your home subsidies for energy conservation   Replacing an entire roof measures   Paving your driveway     Installing central air conditioning • Casualty or theft loss deductions   Rewiring your home and insurance reimbursements       • Assessments for local improvements:     Water connections     Extending utility service lines to the property • Postponed gain from the sale of a home   Sidewalks • Alternative motor vehicle credit  (Form 8910)   Roads       • Alternative fuel vehicle refueling     property credit (Form 8911)           • Residential energy credits (Form 5695)       • Casualty losses: • Depreciation and section 179 deduction   Restoring damaged property     • Nontaxable corporate distributions • Legal fees:     Cost of defending and perfecting a title • Certain canceled debt excluded from   Fees for getting a reduction of an assessment income     • Zoning costs • Easements           • Adoption tax benefits Casualty and theft losses. How to fill out a 1040x tax amendment form   If you have a casualty or theft loss, decrease the basis in your property by any insurance proceeds or other reimbursement and by any deductible loss not covered by insurance. How to fill out a 1040x tax amendment form    You must increase your basis in the property by the amount you spend on repairs that restore the property to its pre-casualty condition. How to fill out a 1040x tax amendment form   For more information on casualty and theft losses, see chapter 25. How to fill out a 1040x tax amendment form Depreciation and section 179 deduction. How to fill out a 1040x tax amendment form   Decrease the basis of your qualifying business property by any section 179 deduction you take and the depreciation you deducted, or could have deducted (including any special depreciation allowance), on your tax returns under the method of depreciation you selected. How to fill out a 1040x tax amendment form   For more information about depreciation and the section 179 deduction, see Publication 946 and the Instructions for Form 4562. How to fill out a 1040x tax amendment form Example. How to fill out a 1040x tax amendment form You owned a duplex used as rental property that cost you $40,000, of which $35,000 was allocated to the building and $5,000 to the land. How to fill out a 1040x tax amendment form You added an improvement to the duplex that cost $10,000. How to fill out a 1040x tax amendment form In February last year, the duplex was damaged by fire. How to fill out a 1040x tax amendment form Up to that time, you had been allowed depreciation of $23,000. How to fill out a 1040x tax amendment form You sold some salvaged material for $1,300 and collected $19,700 from your insurance company. How to fill out a 1040x tax amendment form You deducted a casualty loss of $1,000 on your income tax return for last year. How to fill out a 1040x tax amendment form You spent $19,000 of the insurance proceeds for restoration of the duplex, which was completed this year. How to fill out a 1040x tax amendment form You must use the duplex's adjusted basis after the restoration to determine depreciation for the rest of the property's recovery period. How to fill out a 1040x tax amendment form Figure the adjusted basis of the duplex as follows: Original cost of duplex $35,000 Addition to duplex 10,000 Total cost of duplex $45,000 Minus: Depreciation 23,000 Adjusted basis before casualty $22,000 Minus: Insurance proceeds $19,700     Deducted casualty loss 1,000     Salvage proceeds 1,300 22,000 Adjusted basis after casualty $-0- Add: Cost of restoring duplex 19,000 Adjusted basis after restoration $19,000 Note. How to fill out a 1040x tax amendment form Your basis in the land is its original cost of $5,000. How to fill out a 1040x tax amendment form Easements. How to fill out a 1040x tax amendment form   The amount you receive for granting an easement is generally considered to be proceeds from the sale of an interest in real property. How to fill out a 1040x tax amendment form It reduces the basis of the affected part of the property. How to fill out a 1040x tax amendment form If the amount received is more than the basis of the part of the property affected by the easement, reduce your basis in that part to zero and treat the excess as a recognized gain. How to fill out a 1040x tax amendment form   If the gain is on a capital asset, see chapter 16 for information about how to report it. How to fill out a 1040x tax amendment form If the gain is on property used in a trade or business, see Publication 544 for information about how to report it. How to fill out a 1040x tax amendment form Exclusion of subsidies for energy conservation measures. How to fill out a 1040x tax amendment form   You can exclude from gross income any subsidy you received from a public utility company for the purchase or installation of an energy conservation measure for a dwelling unit. How to fill out a 1040x tax amendment form Reduce the basis of the property for which you received the subsidy by the excluded amount. How to fill out a 1040x tax amendment form For more information about this subsidy, see chapter 12. How to fill out a 1040x tax amendment form Postponed gain from sale of home. How to fill out a 1040x tax amendment form    If you postponed gain from the sale of your main home under rules in effect before May 7, 1997, you must reduce the basis of the home you acquired as a replacement by the amount of the postponed gain. How to fill out a 1040x tax amendment form For more information on the rules for the sale of a home, see chapter 15. How to fill out a 1040x tax amendment form Basis Other Than Cost There are many times when you cannot use cost as basis. How to fill out a 1040x tax amendment form In these cases, the fair market value or the adjusted basis of the property can be used. How to fill out a 1040x tax amendment form Fair market value (FMV) and adjusted basis were discussed earlier. How to fill out a 1040x tax amendment form Property Received for Services If you receive property for your services, include the FMV of the property in income. How to fill out a 1040x tax amendment form The amount you include in income becomes your basis. How to fill out a 1040x tax amendment form If the services were performed for a price agreed on beforehand, it will be accepted as the FMV of the property if there is no evidence to the contrary. How to fill out a 1040x tax amendment form Restricted property. How to fill out a 1040x tax amendment form   If you receive property for your services and the property is subject to certain restrictions, your basis in the property is its FMV when it becomes substantially vested. How to fill out a 1040x tax amendment form However, this rule does not apply if you make an election to include in income the FMV of the property at the time it is transferred to you, less any amount you paid for it. How to fill out a 1040x tax amendment form Property is substantially vested when it is transferable or when it is not subject to a substantial risk of forfeiture (you do not have a good chance of losing it). How to fill out a 1040x tax amendment form For more information, see Restricted Property in Publication 525. How to fill out a 1040x tax amendment form Bargain purchases. How to fill out a 1040x tax amendment form   A bargain purchase is a purchase of an item for less than its FMV. How to fill out a 1040x tax amendment form If, as compensation for services, you buy goods or other property at less than FMV, include the difference between the purchase price and the property's FMV in your income. How to fill out a 1040x tax amendment form Your basis in the property is its FMV (your purchase price plus the amount you include in income). How to fill out a 1040x tax amendment form   If the difference between your purchase price and the FMV is a qualified employee discount, do not include the difference in income. How to fill out a 1040x tax amendment form However, your basis in the property is still its FMV. How to fill out a 1040x tax amendment form See Employee Discounts in Publication 15-B. How to fill out a 1040x tax amendment form Taxable Exchanges A taxable exchange is one in which the gain is taxable or the loss is deductible. How to fill out a 1040x tax amendment form A taxable gain or deductible loss also is known as a recognized gain or loss. How to fill out a 1040x tax amendment form If you receive property in exchange for other property in a taxable exchange, the basis of the property you receive is usually its FMV at the time of the exchange. How to fill out a 1040x tax amendment form Involuntary Conversions If you receive replacement property as a result of an involuntary conversion, such as a casualty, theft, or condemnation, figure the basis of the replacement property using the basis of the converted property. How to fill out a 1040x tax amendment form Similar or related property. How to fill out a 1040x tax amendment form   If you receive replacement property similar or related in service or use to the converted property, the replacement property's basis is the same as the converted property's basis on the date of the conversion, with the following adjustments. How to fill out a 1040x tax amendment form Decrease the basis by the following. How to fill out a 1040x tax amendment form Any loss you recognize on the involuntary conversion. How to fill out a 1040x tax amendment form Any money you receive that you do not spend on similar property. How to fill out a 1040x tax amendment form Increase the basis by the following. How to fill out a 1040x tax amendment form Any gain you recognize on the involuntary conversion. How to fill out a 1040x tax amendment form Any cost of acquiring the replacement property. How to fill out a 1040x tax amendment form Money or property not similar or related. How to fill out a 1040x tax amendment form    If you receive money or property not similar or related in service or use to the converted property, and you buy replacement property similar or related in service or use to the converted property, the basis of the replacement property is its cost decreased by the gain not recognized on the conversion. How to fill out a 1040x tax amendment form Example. How to fill out a 1040x tax amendment form The state condemned your property. How to fill out a 1040x tax amendment form The adjusted basis of the property was $26,000 and the state paid you $31,000 for it. How to fill out a 1040x tax amendment form You realized a gain of $5,000 ($31,000 − $26,000). How to fill out a 1040x tax amendment form You bought replacement property similar in use to the converted property for $29,000. How to fill out a 1040x tax amendment form You recognize a gain of $2,000 ($31,000 − $29,000), the unspent part of the payment from the state. How to fill out a 1040x tax amendment form Your unrecognized gain is $3,000, the difference between the $5,000 realized gain and the $2,000 recognized gain. How to fill out a 1040x tax amendment form The basis of the replacement property is figured as follows: Cost of replacement property $29,000 Minus: Gain not recognized 3,000 Basis of replacement property $26,000 Allocating the basis. How to fill out a 1040x tax amendment form   If you buy more than one piece of replacement property, allocate your basis among the properties based on their respective costs. How to fill out a 1040x tax amendment form Basis for depreciation. How to fill out a 1040x tax amendment form   Special rules apply in determining and depreciating the basis of MACRS property acquired in an involuntary conversion. How to fill out a 1040x tax amendment form For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. How to fill out a 1040x tax amendment form Nontaxable Exchanges A nontaxable exchange is an exchange in which you are not taxed on any gain and you cannot deduct any loss. How to fill out a 1040x tax amendment form If you receive property in a nontaxable exchange, its basis is generally the same as the basis of the property you transferred. How to fill out a 1040x tax amendment form See Nontaxable Trades in chapter 14. How to fill out a 1040x tax amendment form Like-Kind Exchanges The exchange of property for the same kind of property is the most common type of nontaxable exchange. How to fill out a 1040x tax amendment form To qualify as a like-kind exchange, the property traded and the property received must be both of the following. How to fill out a 1040x tax amendment form Qualifying property. How to fill out a 1040x tax amendment form Like-kind property. How to fill out a 1040x tax amendment form The basis of the property you receive is generally the same as the adjusted basis of the property you gave up. How to fill out a 1040x tax amendment form If you trade property in a like-kind exchange and also pay money, the basis of the property received is the adjusted basis of the property you gave up increased by the money you paid. How to fill out a 1040x tax amendment form Qualifying property. How to fill out a 1040x tax amendment form   In a like-kind exchange, you must hold for investment or for productive use in your trade or business both the property you give up and the property you receive. How to fill out a 1040x tax amendment form Like-kind property. How to fill out a 1040x tax amendment form   There must be an exchange of like-kind property. How to fill out a 1040x tax amendment form Like-kind properties are properties of the same nature or character, even if they differ in grade or quality. How to fill out a 1040x tax amendment form The exchange of real estate for real estate and personal property for similar personal property are exchanges of like-kind property. How to fill out a 1040x tax amendment form Example. How to fill out a 1040x tax amendment form You trade in an old truck used in your business with an adjusted basis of $1,700 for a new one costing $6,800. How to fill out a 1040x tax amendment form The dealer allows you $2,000 on the old truck, and you pay $4,800. How to fill out a 1040x tax amendment form This is a like-kind exchange. How to fill out a 1040x tax amendment form The basis of the new truck is $6,500 (the adjusted basis of the old one, $1,700, plus the amount you paid, $4,800). How to fill out a 1040x tax amendment form If you sell your old truck to a third party for $2,000 instead of trading it in and then buy a new one from the dealer, you have a taxable gain of $300 on the sale (the $2,000 sale price minus the $1,700 adjusted basis). How to fill out a 1040x tax amendment form The basis of the new truck is the price you pay the dealer. How to fill out a 1040x tax amendment form Partially nontaxable exchanges. How to fill out a 1040x tax amendment form   A partially nontaxable exchange is an exchange in which you receive unlike property or money in addition to like-kind property. How to fill out a 1040x tax amendment form The basis of the property you receive is the same as the adjusted basis of the property you gave up, with the following adjustments. How to fill out a 1040x tax amendment form Decrease the basis by the following amounts. How to fill out a 1040x tax amendment form Any money you receive. How to fill out a 1040x tax amendment form Any loss you recognize on the exchange. How to fill out a 1040x tax amendment form Increase the basis by the following amounts. How to fill out a 1040x tax amendment form Any additional costs you incur. How to fill out a 1040x tax amendment form Any gain you recognize on the exchange. How to fill out a 1040x tax amendment form If the other party to the exchange assumes your liabilities, treat the debt assumption as money you received in the exchange. How to fill out a 1040x tax amendment form Allocation of basis. How to fill out a 1040x tax amendment form   If you receive like-kind and unlike properties in the exchange, allocate the basis first to the unlike property, other than money, up to its FMV on the date of the exchange. How to fill out a 1040x tax amendment form The rest is the basis of the like-kind property. How to fill out a 1040x tax amendment form More information. How to fill out a 1040x tax amendment form   See Like-Kind Exchanges in chapter 1 of Publication 544 for more information. How to fill out a 1040x tax amendment form Basis for depreciation. How to fill out a 1040x tax amendment form   Special rules apply in determining and depreciating the basis of MACRS property acquired in a like-kind exchange. How to fill out a 1040x tax amendment form For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. How to fill out a 1040x tax amendment form Property Transferred From a Spouse The basis of property transferred to you or transferred in trust for your benefit by your spouse is the same as your spouse's adjusted basis. How to fill out a 1040x tax amendment form The same rule applies to a transfer by your former spouse that is incident to divorce. How to fill out a 1040x tax amendment form However, for property transferred in trust, adjust your basis for any gain recognized by your spouse or former spouse if the liabilities assumed, plus the liabilities to which the property is subject, are more than the adjusted basis of the property transferred. How to fill out a 1040x tax amendment form If the property transferred to you is a series E, series EE, or series I U. How to fill out a 1040x tax amendment form S. How to fill out a 1040x tax amendment form savings bond, the transferor must include in income the interest accrued to the date of transfer. How to fill out a 1040x tax amendment form Your basis in the bond immediately after the transfer is equal to the transferor's basis increased by the interest income includible in the transferor's income. How to fill out a 1040x tax amendment form For more information on these bonds, see chapter 7. How to fill out a 1040x tax amendment form At the time of the transfer, the transferor must give you the records needed to determine the adjusted basis and holding period of the property as of the date of the transfer. How to fill out a 1040x tax amendment form For more information about the transfer of property from a spouse, see chapter 14. How to fill out a 1040x tax amendment form Property Received as a Gift To figure the basis of property you receive as a gift, you must know its adjusted basis to the donor just before it was given to you, its FMV at the time it was given to you, and any gift tax paid on it. How to fill out a 1040x tax amendment form FMV less than donor's adjusted basis. How to fill out a 1040x tax amendment form   If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. How to fill out a 1040x tax amendment form Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you held the property. How to fill out a 1040x tax amendment form Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustments to basis while you held the property. How to fill out a 1040x tax amendment form See Adjusted Basis , earlier. How to fill out a 1040x tax amendment form Example. How to fill out a 1040x tax amendment form You received an acre of land as a gift. How to fill out a 1040x tax amendment form At the time of the gift, the land had an FMV of $8,000. How to fill out a 1040x tax amendment form The donor's adjusted basis was $10,000. How to fill out a 1040x tax amendment form After you received the property, no events occurred to increase or decrease your basis. How to fill out a 1040x tax amendment form If you later sell the property for $12,000, you will have a $2,000 gain because you must use the donor's adjusted basis at the time of the gift ($10,000) as your basis to figure gain. How to fill out a 1040x tax amendment form If you sell the property for $7,000, you will have a $1,000 loss because you must use the FMV at the time of the gift ($8,000) as your basis to figure loss. How to fill out a 1040x tax amendment form If the sales price is between $8,000 and $10,000, you have neither gain nor loss. How to fill out a 1040x tax amendment form Business property. How to fill out a 1040x tax amendment form   If you hold the gift as business property, your basis for figuring any depreciation, depletion, or amortization deductions is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you hold the property. How to fill out a 1040x tax amendment form FMV equal to or greater than donor's adjusted basis. How to fill out a 1040x tax amendment form   If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis at the time you received the gift. How to fill out a 1040x tax amendment form Increase your basis by all or part of any gift tax paid, depending on the date of the gift, explained later. How to fill out a 1040x tax amendment form   Also, for figuring gain or loss from a sale or other disposition or for figuring depreciation, depletion, or amortization deductions on business property, you must increase or decrease your basis (the donor's adjusted basis) by any required adjustments to basis while you held the property. How to fill out a 1040x tax amendment form See Adjusted Basis , earlier. How to fill out a 1040x tax amendment form   If you received a gift during the tax year, increase your basis in the gift (the donor's adjusted basis) by the part of the gift tax paid on it due to the net increase in value of the gift. How to fill out a 1040x tax amendment form Figure the increase by multiplying the gift tax paid by a fraction. How to fill out a 1040x tax amendment form The numerator of the fraction is the net increase in value of the gift and the denominator is the amount of the gift. How to fill out a 1040x tax amendment form   The net increase in value of the gift is the FMV of the gift minus the donor's adjusted basis. How to fill out a 1040x tax amendment form The amount of the gift is its value for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. How to fill out a 1040x tax amendment form Example. How to fill out a 1040x tax amendment form In 2013, you received a gift of property from your mother that had an FMV of $50,000. How to fill out a 1040x tax amendment form Her adjusted basis was $20,000. How to fill out a 1040x tax amendment form The amount of the gift for gift tax purposes was $36,000 ($50,000 minus the $14,000 annual exclusion). How to fill out a 1040x tax amendment form She paid a gift tax of $7,320 on the property. How to fill out a 1040x tax amendment form Your basis is $26,076, figured as follows: Fair market value $50,000 Minus: Adjusted basis −20,000 Net increase in value $30,000     Gift tax paid $7,320 Multiplied by ($30,000 ÷ $36,000) × . How to fill out a 1040x tax amendment form 83 Gift tax due to net increase in value $6,076 Adjusted basis of property to your mother +20,000 Your basis in the property $26,076 Note. How to fill out a 1040x tax amendment form If you received a gift before 1977, your basis in the gift (the donor's adjusted basis) includes any gift tax paid on it. How to fill out a 1040x tax amendment form However, your basis cannot exceed the FMV of the gift at the time it was given to you. How to fill out a 1040x tax amendment form Inherited Property Your basis in property you inherited from a decedent, who died before January 1, 2010, or after December 31, 2010, is generally one of the following: The FMV of the property at the date of the decedent's death. How to fill out a 1040x tax amendment form The FMV on the alternate valuation date if the personal representative for the estate elects to use alternate valuation. How to fill out a 1040x tax amendment form The value under the special-use valuation method for real property used in farming or a closely held business if elected for estate tax purposes. How to fill out a 1040x tax amendment form The decedent's adjusted basis in land to the extent of the value excluded from the decedent's taxable estate as a qualified conservation easement. How to fill out a 1040x tax amendment form If a federal estate tax return does not have to be filed, your basis in the inherited property is its appraised value at the date of death for state inheritance or transmission taxes. How to fill out a 1040x tax amendment form For more information, see the instructions to Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. How to fill out a 1040x tax amendment form Property inherited from a decedent who died in 2010. How to fill out a 1040x tax amendment form   If you inherited property from a decedent who died in 2010, special rules may apply. How to fill out a 1040x tax amendment form For more information, see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010. How to fill out a 1040x tax amendment form Community property. How to fill out a 1040x tax amendment form   In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), husband and wife are each usually considered to own half the community property. How to fill out a 1040x tax amendment form When either spouse dies, the total value of the community property, even the part belonging to the surviving spouse, generally becomes the basis of the entire property. How to fill out a 1040x tax amendment form For this rule to apply, at least half the value of the community property interest must be includible in the decedent's gross estate, whether or not the estate must file a return. How to fill out a 1040x tax amendment form Example. How to fill out a 1040x tax amendment form You and your spouse owned community property that had a basis of $80,000. How to fill out a 1040x tax amendment form When your spouse died, half the FMV of the community interest was includible in your spouse's estate. How to fill out a 1040x tax amendment form The FMV of the community interest was $100,000. How to fill out a 1040x tax amendment form The basis of your half of the property after the death of your spouse is $50,000 (half of the $100,000 FMV). How to fill out a 1040x tax amendment form The basis of the other half to your spouse's heirs is also $50,000. How to fill out a 1040x tax amendment form For more information about community property, see Publication 555, Community Property. How to fill out a 1040x tax amendment form Property Changed From Personal to Business or Rental Use If you hold property for personal use and then change it to business use or use it to produce rent, you can begin to depreciate the property at the time of the change. How to fill out a 1040x tax amendment form To do so, you must figure its basis for depreciation at the time of the change. How to fill out a 1040x tax amendment form An example of changing property held for personal use to business or rental use would be renting out your former personal residence. How to fill out a 1040x tax amendment form Basis for depreciation. How to fill out a 1040x tax amendment form   The basis for depreciation is the lesser of the following amounts. How to fill out a 1040x tax amendment form The FMV of the property on the date of the change. How to fill out a 1040x tax amendment form Your adjusted basis on the date of the change. How to fill out a 1040x tax amendment form Example. How to fill out a 1040x tax amendment form Several years ago, you paid $160,000 to have your house built on a lot that cost $25,000. How to fill out a 1040x tax amendment form You paid $20,000 for permanent improvements to the house and claimed a $2,000 casualty loss deduction for damage to the house before changing the property to rental use last year. How to fill out a 1040x tax amendment form Because land is not depreciable, you include only the cost of the house when figuring the basis for depreciation. How to fill out a 1040x tax amendment form Your adjusted basis in the house when you changed its use was $178,000 ($160,000 + $20,000 − $2,000). How to fill out a 1040x tax amendment form On the same date, your property had an FMV of $180,000, of which $15,000 was for the land and $165,000 was for the house. How to fill out a 1040x tax amendment form The basis for figuring depreciation on the house is its FMV on the date of the change ($165,000) because it is less than your adjusted basis ($178,000). How to fill out a 1040x tax amendment form Sale of property. How to fill out a 1040x tax amendment form   If you later sell or dispose of property changed to business or rental use, the basis you use will depend on whether you are figuring gain or loss. How to fill out a 1040x tax amendment form Gain. How to fill out a 1040x tax amendment form   The basis for figuring a gain is your adjusted basis in the property when you sell the property. How to fill out a 1040x tax amendment form Example. How to fill out a 1040x tax amendment form Assume the same facts as in the previous example except that you sell the property at a gain after being allowed depreciation deductions of $37,500. How to fill out a 1040x tax amendment form Your adjusted basis for figuring gain is $165,500 ($178,000 + $25,000 (land) − $37,500). How to fill out a 1040x tax amendment form Loss. How to fill out a 1040x tax amendment form   Figure the basis for a loss starting with the smaller of your adjusted basis or the FMV of the property at the time of the change to business or rental use. How to fill out a 1040x tax amendment form Then make adjustments (increases and decreases) for the period after the change in the property's use, as discussed earlier under Adjusted Basis . How to fill out a 1040x tax amendment form Example. How to fill out a 1040x tax amendment form Assume the same facts as in the previous example, except that you sell the property at a loss after being allowed depreciation deductions of $37,500. How to fill out a 1040x tax amendment form In this case, you would start with the FMV on the date of the change to rental use ($180,000), because it is less than the adjusted basis of $203,000 ($178,000 + $25,000 (land)) on that date. How to fill out a 1040x tax amendment form Reduce that amount ($180,000) by the depreciation deductions ($37,500). How to fill out a 1040x tax amendment form The basis for loss is $142,500 ($180,000 − $37,500). How to fill out a 1040x tax amendment form Stocks and Bonds The basis of stocks or bonds you buy generally is the purchase price plus any costs of purchase, such as commissions and recording or transfer fees. How to fill out a 1040x tax amendment form If you get stocks or bonds other than by purchase, your basis is usually determined by the FMV or the previous owner's adjusted basis, as discussed earlier. How to fill out a 1040x tax amendment form You must adjust the basis of stocks for certain events that occur after purchase. How to fill out a 1040x tax amendment form For example, if you receive additional stock from nontaxable stock dividends or stock splits, reduce your basis for each share of stock by dividing the adjusted basis of the old stock by the number of shares of old and new stock. How to fill out a 1040x tax amendment form This rule applies only when the additional stock received is identical to the stock held. How to fill out a 1040x tax amendment form Also reduce your basis when you receive nontaxable distributions. How to fill out a 1040x tax amendment form They are a return of capital. How to fill out a 1040x tax amendment form Example. How to fill out a 1040x tax amendment form In 2011 you bought 100 shares of XYZ stock for $1,000 or $10 a share. How to fill out a 1040x tax amendment form In 2012 you bought 100 shares of XYZ stock for $1,600 or $16 a share. How to fill out a 1040x tax amendment form In 2013 XYZ declared a 2-for-1 stock split. How to fill out a 1040x tax amendment form You now have 200 shares of stock with a basis of $5 a share and 200 shares with a basis of $8 a share. How to fill out a 1040x tax amendment form Other basis. How to fill out a 1040x tax amendment form   There are other ways to figure the basis of stocks or bonds depending on how you acquired them. How to fill out a 1040x tax amendment form For detailed information, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. How to fill out a 1040x tax amendment form Identifying stocks or bonds sold. How to fill out a 1040x tax amendment form   If you can adequately identify the shares of stock or the bonds you sold, their basis is the cost or other basis of the particular shares of stocks or bonds. How to fill out a 1040x tax amendment form If you buy and sell securities at various times in varying quantities and you cannot adequately identify the shares you sell, the basis of the securities you sell is the basis of the securities you acquired first. How to fill out a 1040x tax amendment form For more information about identifying securities you sell, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. How to fill out a 1040x tax amendment form Mutual fund shares. How to fill out a 1040x tax amendment form   If you sell mutual fund shares you acquired at various times and prices and left on deposit in an account kept by a custodian or agent, you can elect to use an average basis. How to fill out a 1040x tax amendment form For more information, see Publication 550. How to fill out a 1040x tax amendment form Bond premium. How to fill out a 1040x tax amendment form   If you buy a taxable bond at a premium and elect to amortize the premium, reduce the basis of the bond by the amortized premium you deduct each year. How to fill out a 1040x tax amendment form See Bond Premium Amortization in chapter 3 of Publication 550 for more information. How to fill out a 1040x tax amendment form Although you cannot deduct the premium on a tax-exempt bond, you must amortize the premium each year and reduce your basis in the bond by the amortized amount. How to fill out a 1040x tax amendment form Original issue discount (OID) on debt instruments. How to fill out a 1040x tax amendment form   You must increase your basis in an OID debt instrument by the OID you include in income for that instrument. How to fill out a 1040x tax amendment form See Original Issue Discount (OID) in chapter 7 and Publication 1212, Guide To Original Issue Discount (OID) Instruments. How to fill out a 1040x tax amendment form Tax-exempt obligations. How to fill out a 1040x tax amendment form    OID on tax-exempt obligations is generally not taxable. How to fill out a 1040x tax amendment form However, when you dispose of a tax-exempt obligation issued after September 3, 1982, and acquired after March 1, 1984, you must accrue OID on the obligation to determine its adjusted basis. How to fill out a 1040x tax amendment form The accrued OID is added to the basis of the obligation to determine your gain or loss. How to fill out a 1040x tax amendment form See chapter 4 of Publication 550. How to fill out a 1040x tax amendment form Prev  Up  Next   Home   More Online Publications