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I Need To File 2009 Tax Return

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I Need To File 2009 Tax Return

I need to file 2009 tax return Publication 929 - Additional Material Table of Contents How To Get Tax HelpLow Income Taxpayer Clinics This image is too large to be displayed in the current screen. I need to file 2009 tax return Please click the link to view the image. I need to file 2009 tax return Form 1040A, page 1, for Joshua A. I need to file 2009 tax return Blake This image is too large to be displayed in the current screen. I need to file 2009 tax return Please click the link to view the image. I need to file 2009 tax return Form 1040A, page 2, for Joshua A. I need to file 2009 tax return Blake This image is too large to be displayed in the current screen. I need to file 2009 tax return Please click the link to view the image. I need to file 2009 tax return Form 8615 for Joshua A. I need to file 2009 tax return Blake Filled-in Qualified Dividends and Capital Gain Tax Worksheet #1 Before you begin: Be sure you do not have to file Form 1040 (see the instructions for Form 1040A, line 10) 1. I need to file 2009 tax return Enter the amount from Form 1040A, line 27 1. I need to file 2009 tax return 48,800*       2. I need to file 2009 tax return Enter the amount from Form 1040A, line 9b 2. I need to file 2009 tax return 300*           3. I need to file 2009 tax return Enter the amount from Form 1040A, line 10 3. I need to file 2009 tax return 200*           4. I need to file 2009 tax return Add lines 2 and 3 4. I need to file 2009 tax return 500       5. I need to file 2009 tax return Subtract line 4 from line 1. I need to file 2009 tax return If zero or less, enter -0- 5. I need to file 2009 tax return 48,300       6. I need to file 2009 tax return Enter the smaller of:                 •The amount on line 1, or                   •$36,250 if single or married filing separately,                   $72,500 if married filing jointly or qualifying widow(er),   or 6. I need to file 2009 tax return 48,800*         $48,600 if head of household. I need to file 2009 tax return                   7. I need to file 2009 tax return Enter the smaller of line 5 or line 6 7. I need to file 2009 tax return 48,300       8. I need to file 2009 tax return Subtract line 7 from line 6. I need to file 2009 tax return This amount is taxed at 0% 8. I need to file 2009 tax return   500       9. I need to file 2009 tax return Enter the smaller of line 1 or line 4 9. I need to file 2009 tax return 500       10. I need to file 2009 tax return Enter the amount from line 8 10. I need to file 2009 tax return   500       11. I need to file 2009 tax return Subtract line 10 from line 9 11. I need to file 2009 tax return  -0-       12. I need to file 2009 tax return Multiply line 11 by 15% (. I need to file 2009 tax return 15) 12. I need to file 2009 tax return -0-   13. I need to file 2009 tax return Use the Tax Table to figure the tax on the amount on line 5. I need to file 2009 tax return Enter the tax here 13. I need to file 2009 tax return 6,356   14. I need to file 2009 tax return Add lines 12 and 13 14. I need to file 2009 tax return 6,356   15. I need to file 2009 tax return Use the Tax Table to figure the tax on the amount on line 1. I need to file 2009 tax return Enter the tax here 15. I need to file 2009 tax return 6,431   16. I need to file 2009 tax return Tax on all taxable income. I need to file 2009 tax return Enter the smaller of line 14 or line 15 here and on Form 1040A, line 28 16. I need to file 2009 tax return 6,356       *See the instructions under Using the Qualified Dividends and Capital Gain Tax Worksheet for line 9 tax in the Form 8615 instructions. I need to file 2009 tax return Filled-in Qualified Dividends and Capital Gain Tax Worksheet #2 Before you begin: Be sure you do not have to file Form 1040 (see the instructions for Form 1040A, line 10) 1. I need to file 2009 tax return Enter the amount from Form 1040A, line 27 1. I need to file 2009 tax return 1,650*       2. I need to file 2009 tax return Enter the amount from Form 1040A, line 9b 2. I need to file 2009 tax return 750*           3. I need to file 2009 tax return Enter the amount from Form 1040A, line 10 3. I need to file 2009 tax return 500*           4. I need to file 2009 tax return Add lines 2 and 3 4. I need to file 2009 tax return 1,250       5. I need to file 2009 tax return Subtract line 4 from line 1. I need to file 2009 tax return If zero or less, enter -0- 5. I need to file 2009 tax return  400       6. I need to file 2009 tax return Enter the smaller of:                 •The amount on line 1, or                   •$36,250 if single or married filing separately,                   $72,500 if married filing jointly or qualifying   widow(er), or 6. I need to file 2009 tax return 1,650*         $48,600 if head of household. I need to file 2009 tax return                   7. I need to file 2009 tax return Enter the smaller of line 5 or line 6 7. I need to file 2009 tax return   400       8. I need to file 2009 tax return Subtract line 7 from line 6. I need to file 2009 tax return This amount is taxed at 0% 8. I need to file 2009 tax return 1,250       9. I need to file 2009 tax return Enter the smaller of line 1 or line 4 9. I need to file 2009 tax return 1,250       10. I need to file 2009 tax return Enter the amount from line 8 10. I need to file 2009 tax return 1,250       11. I need to file 2009 tax return Subtract line 10 from line 9 11. I need to file 2009 tax return -0-       12. I need to file 2009 tax return Multiply line 11 by 15% (. I need to file 2009 tax return 15) 12. I need to file 2009 tax return -0-   13. I need to file 2009 tax return Use the Tax Table to figure the tax on the amount on line 5. I need to file 2009 tax return Enter the tax here 13. I need to file 2009 tax return 41*   14. I need to file 2009 tax return Add lines 12 and 13 14. I need to file 2009 tax return 41   15. I need to file 2009 tax return Use the Tax Table to figure the tax on the amount on line 1. I need to file 2009 tax return Enter the tax here 15. I need to file 2009 tax return 166*   16. I need to file 2009 tax return Tax on all taxable income. I need to file 2009 tax return Enter the smaller of line 14 or line 15 here and on Form 1040A, line 28 16. I need to file 2009 tax return 41       *See the instructions under Using the Qualified Dividends and Capital Gain Tax Worksheet for line 15 tax in the Form 8615 instructions. I need to file 2009 tax return Filled-in Qualified Dividends and Capital Gain Tax Worksheet #3 Before you begin: Be sure you do not have to file Form 1040 (see the instructions for Form 1040A, line 10) 1. I need to file 2009 tax return Enter the amount from Form 1040A, line 27 1. I need to file 2009 tax return 2,450       2. I need to file 2009 tax return Enter the amount from Form 1040A, line 9b 2. I need to file 2009 tax return 1,050           3. I need to file 2009 tax return Enter the amount from Form 1040A, line 10 3. I need to file 2009 tax return 700           4. I need to file 2009 tax return Add lines 2 and 3 4. I need to file 2009 tax return 1,750       5. I need to file 2009 tax return Subtract line 4 from line 1. I need to file 2009 tax return If zero or less, enter -0- 5. I need to file 2009 tax return    700       6. I need to file 2009 tax return Enter the smaller of:                 •The amount on line 1, or                   •$36,250 if single or married filing separately,                   $72,500 if married filing jointly or qualifying   widow(er), or 6. I need to file 2009 tax return 2,450         $48,600 if head of household. I need to file 2009 tax return                   7. I need to file 2009 tax return Enter the smaller of line 5 or line 6 7. I need to file 2009 tax return  700       8. I need to file 2009 tax return Subtract line 7 from line 6. I need to file 2009 tax return This amount is taxed at 0% 8. I need to file 2009 tax return 1,750       9. I need to file 2009 tax return Enter the smaller of line 1 or line 4 9. I need to file 2009 tax return 1,750       10. I need to file 2009 tax return Enter the amount from line 8 10. I need to file 2009 tax return 1,750       11. I need to file 2009 tax return Subtract line 10 from line 9 11. I need to file 2009 tax return -0-       12. I need to file 2009 tax return Multiply line 11 by 15% (. I need to file 2009 tax return 15) 12. I need to file 2009 tax return -0-   13. I need to file 2009 tax return Use the Tax Table to figure the tax on the amount on line 5. I need to file 2009 tax return Enter the tax here 13. I need to file 2009 tax return  71   14. I need to file 2009 tax return Add lines 12 and 13 14. I need to file 2009 tax return  71   15. I need to file 2009 tax return Use the Tax Table to figure the tax on the amount on line 1. I need to file 2009 tax return Enter the tax here 15. I need to file 2009 tax return 246   16. I need to file 2009 tax return Tax on all taxable income. I need to file 2009 tax return Enter the smaller of line 14 or line 15 here and on Form 1040A, line 28 16. I need to file 2009 tax return  71         How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. I need to file 2009 tax return Free help with your tax return. I need to file 2009 tax return   You can get free help preparing your return nationwide from IRS-certified volunteers. I need to file 2009 tax return The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. I need to file 2009 tax return The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. I need to file 2009 tax return Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. I need to file 2009 tax return In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. I need to file 2009 tax return To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. I need to file 2009 tax return gov, download the IRS2Go app, or call 1-800-906-9887. I need to file 2009 tax return   As part of the TCE program, AARP offers the Tax-Aide counseling program. I need to file 2009 tax return To find the nearest AARP Tax-Aide site, visit AARP's website at www. I need to file 2009 tax return aarp. I need to file 2009 tax return org/money/taxaide or call 1-888-227-7669. I need to file 2009 tax return For more information on these programs, go to IRS. I need to file 2009 tax return gov and enter “VITA” in the search box. I need to file 2009 tax return Internet. I need to file 2009 tax return    IRS. I need to file 2009 tax return gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. I need to file 2009 tax return Download the free IRS2Go app from the iTunes app store or from Google Play. I need to file 2009 tax return Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. I need to file 2009 tax return Check the status of your 2013 refund with the Where's My Refund? application on IRS. I need to file 2009 tax return gov or download the IRS2Go app and select the Refund Status option. I need to file 2009 tax return The IRS issues more than 9 out of 10 refunds in less than 21 days. I need to file 2009 tax return Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. I need to file 2009 tax return You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. I need to file 2009 tax return The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. I need to file 2009 tax return Use the Interactive Tax Assistant (ITA) to research your tax questions. I need to file 2009 tax return No need to wait on the phone or stand in line. I need to file 2009 tax return The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. I need to file 2009 tax return When you reach the response screen, you can print the entire interview and the final response for your records. I need to file 2009 tax return New subject areas are added on a regular basis. I need to file 2009 tax return  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. I need to file 2009 tax return gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. I need to file 2009 tax return You can use the IRS Tax Map, to search publications and instructions by topic or keyword. I need to file 2009 tax return The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. I need to file 2009 tax return When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. I need to file 2009 tax return Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. I need to file 2009 tax return You can also ask the IRS to mail a return or an account transcript to you. I need to file 2009 tax return Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. I need to file 2009 tax return gov or by calling 1-800-908-9946. I need to file 2009 tax return Tax return and tax account transcripts are generally available for the current year and the past three years. I need to file 2009 tax return Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. I need to file 2009 tax return Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. I need to file 2009 tax return If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. I need to file 2009 tax return Check the status of your amended return using Where's My Amended Return? Go to IRS. I need to file 2009 tax return gov and enter Where's My Amended Return? in the search box. I need to file 2009 tax return You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. I need to file 2009 tax return It can take up to 3 weeks from the date you mailed it to show up in our system. I need to file 2009 tax return Make a payment using one of several safe and convenient electronic payment options available on IRS. I need to file 2009 tax return gov. I need to file 2009 tax return Select the Payment tab on the front page of IRS. I need to file 2009 tax return gov for more information. I need to file 2009 tax return Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. I need to file 2009 tax return Figure your income tax withholding with the IRS Withholding Calculator on IRS. I need to file 2009 tax return gov. I need to file 2009 tax return Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. I need to file 2009 tax return Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. I need to file 2009 tax return gov. I need to file 2009 tax return Request an Electronic Filing PIN by going to IRS. I need to file 2009 tax return gov and entering Electronic Filing PIN in the search box. I need to file 2009 tax return Download forms, instructions and publications, including accessible versions for people with disabilities. I need to file 2009 tax return Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. I need to file 2009 tax return gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. I need to file 2009 tax return An employee can answer questions about your tax account or help you set up a payment plan. I need to file 2009 tax return Before you visit, check the Office Locator on IRS. I need to file 2009 tax return gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. I need to file 2009 tax return If you have a special need, such as a disability, you can request an appointment. I need to file 2009 tax return Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. I need to file 2009 tax return Apply for an Employer Identification Number (EIN). I need to file 2009 tax return Go to IRS. I need to file 2009 tax return gov and enter Apply for an EIN in the search box. I need to file 2009 tax return Read the Internal Revenue Code, regulations, or other official guidance. I need to file 2009 tax return Read Internal Revenue Bulletins. I need to file 2009 tax return Sign up to receive local and national tax news and more by email. I need to file 2009 tax return Just click on “subscriptions” above the search box on IRS. I need to file 2009 tax return gov and choose from a variety of options. I need to file 2009 tax return    Phone. I need to file 2009 tax return You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. I need to file 2009 tax return Download the free IRS2Go app from the iTunes app store or from Google Play. I need to file 2009 tax return Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. I need to file 2009 tax return gov, or download the IRS2Go app. I need to file 2009 tax return Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. I need to file 2009 tax return The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. I need to file 2009 tax return Most VITA and TCE sites offer free electronic filing. I need to file 2009 tax return Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. I need to file 2009 tax return Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. I need to file 2009 tax return Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. I need to file 2009 tax return If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. I need to file 2009 tax return The IRS issues more than 9 out of 10 refunds in less than 21 days. I need to file 2009 tax return Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. I need to file 2009 tax return Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. I need to file 2009 tax return The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. I need to file 2009 tax return Note, the above information is for our automated hotline. I need to file 2009 tax return Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. I need to file 2009 tax return Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. I need to file 2009 tax return You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. I need to file 2009 tax return It can take up to 3 weeks from the date you mailed it to show up in our system. I need to file 2009 tax return Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). I need to file 2009 tax return You should receive your order within 10 business days. I need to file 2009 tax return Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. I need to file 2009 tax return If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. I need to file 2009 tax return Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. I need to file 2009 tax return The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. I need to file 2009 tax return These individuals can also contact the IRS through relay services such as the Federal Relay Service. I need to file 2009 tax return    Walk-in. I need to file 2009 tax return You can find a selection of forms, publications and services — in-person. I need to file 2009 tax return Products. I need to file 2009 tax return You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. I need to file 2009 tax return Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. I need to file 2009 tax return Services. I need to file 2009 tax return You can walk in to your local TAC for face-to-face tax help. I need to file 2009 tax return An employee can answer questions about your tax account or help you set up a payment plan. I need to file 2009 tax return Before visiting, use the Office Locator tool on IRS. I need to file 2009 tax return gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. I need to file 2009 tax return    Mail. I need to file 2009 tax return You can send your order for forms, instructions, and publications to the address below. I need to file 2009 tax return You should receive a response within 10 business days after your request is received. I need to file 2009 tax return Internal Revenue Service 1201 N. I need to file 2009 tax return Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. I need to file 2009 tax return The Taxpayer Advocate Service (TAS) is your voice at the IRS. I need to file 2009 tax return Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. I need to file 2009 tax return   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. I need to file 2009 tax return We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. I need to file 2009 tax return You face (or your business is facing) an immediate threat of adverse action. I need to file 2009 tax return You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. I need to file 2009 tax return   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. I need to file 2009 tax return Here's why we can help: TAS is an independent organization within the IRS. I need to file 2009 tax return Our advocates know how to work with the IRS. I need to file 2009 tax return Our services are free and tailored to meet your needs. I need to file 2009 tax return We have offices in every state, the District of Columbia, and Puerto Rico. I need to file 2009 tax return   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. I need to file 2009 tax return   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. I need to file 2009 tax return If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. I need to file 2009 tax return Low Income Taxpayer Clinics Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. I need to file 2009 tax return Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. I need to file 2009 tax return Visit Taxpayer Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. I need to file 2009 tax return Prev  Up  Next   Home   More Online Publications
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Sale of Assets Financed with Tax-Exempt Bonds by State and Local Governments and 501(c)(3) Organizations

Tax Exempt Bonds (“TEB”) focuses on providing participants in the municipal bond industry with quality service to assist issuers and conduit borrowers in understanding their tax responsibilities. TEB has initiated an outreach and educational services program to increase understanding and compliance with tax law applicable to tax-exempt bonds. As part of this service TEB is providing the following information with respect to the sale of property financed by tax-exempt bonds. Governmental issuers and 501(c)(3) organizations may use this information to establish practices to monitor tax compliance throughout the period that their bonds are outstanding. This information is not intended to be cited as an authoritative source. TEB recommends that issuers and 501(c)(3) organizations review this basic information concerning remedial actions in consultation with their counsel.

For remedial action with respect to exempt facility bonds, see section 1.142-2 of the Income Tax Regulations (the “Regulations”), and for build America bonds, see IRM 7.2.3.1.2.3.

Generally

To raise needed funds, state and local governments and 501(c)(3) organizations may plan to sell property financed with tax-exempt bonds. The sale of such property could cause the bond issue to become taxable. A timely remedial action, if necessary, will help ensure that the interest on the bond issue remains tax-exempt.

There are three basic remedial action options as generally described below:

  • Redemption or defeasance of nonqualified bonds
  • Alternative use of disposition proceeds
  • Alternative use of facility

Governmental Bonds Example

A governmental bond is one that is not a private activity bond. A bond is a private activity bond if both: (i) more than 10% of the proceeds of a bond issue are used for a private business use (the private business use test); and (ii) more than 10% of the debt service on the bonds is directly or indirectly secured by an interest in property or payments with respect to property used for a private business use or derived from payments in respect of property used for a private business use (the private security or payment test). The sale of bond-financed property, a “deliberate action,” may cause the bond issue to meet both of these tests.

Private business use, generally, is use directly or indirectly in a trade or business carried on by any person other than a governmental unit. The result of meeting both the private business use test and the private security or payment test (together, the private business tests) is that the tax-exempt bond issue becomes a taxable private activity bond.

An example of when governmental bonds are likely to meet the private business tests is the sale of a tax-exempt bond financed facility to a corporation. The sale is a deliberate action because the sale was within the issuer’s control. Depending on how much of the proceeds of the bond issue that the issuer used to construct or acquire the facility and how long after the bonds are issued that the sale occurs, the private business use test may be met since the purchaser is not a governmental entity. If the present value of the sales price is greater than 10% of the present value of the debt service on the bonds, the private security or payment test is met. If the revenues from the facility were pledged as security for the payment of debt service on the bonds and are expected to be more than 10% of the present value of the debt service, the private security or payment test is met (regardless of the sales price to the new purchaser). If the bond issue meets both the private business use test and the private security or payment test, the bonds are taxable unless remedial action is taken as described below.

Qualified 501(c)(3) Bonds Example

If the bonds financing the property are qualified 501(c)(3) bonds, the private business use test threshold of 10% is reduced to 5%. The 5% is further reduced by the percentage of proceeds of the bonds used to pay costs of issuance. (Up to 2% of the proceeds may be used for costs of issuance.) Additionally, use of tax-exempt bond financed property in an unrelated trade or business of any 501(c)(3) organization, as described in section 513 of the Internal Revenue Code (the “Code”), is considered private business use and counts toward the 5% limit.

An example of qualified 501(c)(3) bonds likely to meet the private business tests is the sale of tax-exempt bond financed land to a taxable corporation. The sale is a deliberate action because the sale was within the issuer’s (or 501(c)(3) borrower’s) control. Depending on how much of the proceeds of the bond issue that the issuer or 501(c)(3) borrower used to construct or acquire the facility and how long after the bonds are issued that the sale occurs, the private business use test may be met since the purchaser is not a governmental entity or a 501(c)(3) organization. If the parcel of land sold was pledged as security for the payment of debt service on the bonds, the private security or payment test is met if the sales price is more than 5% of the present value of the debt service on the bonds. If the revenues from the facility were pledged as security for the payment of debt service on the bonds and are expected to be more than 5% of the present value of the debt service, the private security or payment test is met (regardless of the sales price to the new purchaser). If the bond issue meets both the private business use test and the private security or payment test, the bonds are taxable unless remedial action is taken as described below.

A qualified 501(c)(3) bond is one where, among other requirements, the tax-exempt bond financed property is owned by a 501(c)(3) organization or a governmental unit. An example of qualified 501(c)(3) bonds failing to meet this requirement is the sale of the tax-exempt bond financed land to a taxable corporation. Accordingly, the bonds are taxable unless remedial action is taken as described below.

Remedial Action under the Treasury Regulations

The Regulations permit an issuer to take remedial action to preclude the sale of tax-exempt bond financed assets from causing the bonds to become taxable bonds. There are five basic conditions that an issuer must meet to qualify to take a remedial action. The conditions are:

  • The issuer must have reasonably expected on the issue date that the bonds would not meet either the applicable private business tests (including the ownership test for qualified 501(c)(3) bonds) or the private loan financing test for the entire term of the bonds.
  • The term of the bonds must not be longer than reasonably necessary for the qualified purposes of the issue (as a guideline, the term is not greater than 120% of the average reasonably expected economic life of the financed property).
  • Generally, the terms of a sale must be a bona fide and arm’s-length arrangement for fair market value.
  • Disposition proceeds must be treated as gross proceeds for arbitrage and rebate purposes. Disposition proceeds are any amounts, including property, derived from the sale, exchange or other disposition of the tax-exempt bond financed property.
  • Except for a remedial action involving the redemption or defeasance of nonqualified bonds, the proceeds must have been spent on a qualified purpose before the date of the deliberate action, that is, the sale of the bond-financed assets.

Redemption or Defeasance of Nonqualified Bonds

Generally, in the case of a sale of bond-financed property, the nonqualified bonds are the portion of the outstanding bonds equal to the percentage of the proceeds of the bond issue that financed that property. For example, if 50% of the proceeds of a bond issue financed the sold property, the nonqualified bonds equal 50% of the outstanding bonds of the issue at the time of the sale.

The first type of remedial action available is the redemption or defeasance of all of the nonqualified bonds within 90 days of the deliberate action. (Generally, proceeds of another issue of tax-exempt bonds may not be used for this redemption.) If the disposition proceeds are all cash, the issuer need not redeem or defease all of the nonqualified bonds, but must use all of the disposition proceeds to redeem a pro rata portion of nonqualified bonds. The redemption must be on the earliest call date after the deliberate action, or if the earliest call date is more than 90 days after the deliberate action, the issuer must establish a defeasance escrow within 90 days of the deliberate action. Defeasance is only permitted as a remedial action if the first call date is no more than 10 ½ years from the issue date of the bonds. The issuer must provide written notice to the Commissioner of the escrow within 90 days of its establishment.

Alternative Use of Disposition Proceeds

The second type of remedial action, available when the seller receives only cash, allows the issuer to spend the disposition proceeds within two years of the date of the sale for an alternative qualifying use. The issuer must treat the disposition proceeds as proceeds of the bonds, and must not take any action after the date of the sale to cause either the applicable private business use tests or the private loan financing test to be met. (If the bonds are qualified 501(c)(3) bonds, the disposition proceeds must be used for a qualified purpose under section 145 of the Code.) If the issuer does not expect the full amount of the disposition proceeds to be spent for a qualifying purpose within the two year period, it must use the balance of disposition proceeds to redeem (or defease) nonqualified bonds as allowed for the first type of remedial action described above.

Note: If the proceeds of a governmental bond issue are to be subsequently used by a 501(c)(3) organization, remediation by spending the disposition proceeds for an alternate use requires that the nonqualified bonds satisfy all the requirements for qualified 501(c)(3) bonds beginning on the date of the sale.

Alternative Use of Facility

The third type of remedial action available to the issuer is when the tax-exempt financed facility will be used after the sale for a purpose that is a qualifying purpose for another type of tax-exempt bonds (provided that the purchaser of the facility does not use tax-exempt bond proceeds for its purchase). The nonqualified bonds must satisfy all the requirements for the alternate type of tax-exempt bonds beginning on the date of the sale. The issuer must either apply any disposition proceeds resulting from the sale to pay the debt service on the bonds on the next available payment date or deposit the proceeds into an escrow within 90 days of their receipt. If the issuer must establish an escrow, the investment yield on the disposition proceeds must be restricted to the yield on the bonds and the escrow used to pay debt service on the next available payment date.

Allocation of Disposition Proceeds

For all three remedial actions, if the property was financed by different sources, the issuer must first allocate disposition proceeds to the outstanding bonds in proportion to the principal amounts of the outstanding bonds. If the disposition proceeds are not greater than the principal amount of outstanding bonds allocated to the sold property, the proceeds must first be allocated to the outstanding bonds before allocating to bonds no longer outstanding or to sources not derived from borrowing (such as revenues of the issuer).

Remedial Actions-Examples

The following examples assume that the above-described five conditions for remedial action are satisfied. Also, in these examples, no bond proceeds were used for costs of issuance or to fund a reserve fund.


Example 1. - Disposition proceeds are less than the principal amount of the outstanding bonds allocated to the sold property.

Issuer issues $10 million of bonds to finance the construction of a community center. Issuer later sells the center for $5 million, its fair market value. At this time, all $10 million of the bonds are still outstanding. The issuer may choose to remediate by using all $5 million of disposition proceeds to redeem within 90 days or establish a defeasance escrow for a pro rata portion of the $10 million of nonqualified bonds. The remaining outstanding $5 million of bonds would not be private activity bonds because the issuer has remediated as required by the Regulations.

Or, the issuer could remediate by using the alternative use of disposition proceeds option. Under this option, the issuer must apply the total amount of disposition proceeds, $5 million, to a qualifying alternative use within two years (or use a combination of the alternative use of disposition proceeds and redemption or defeasance options).

The disposition proceeds are considered gross proceeds of the bonds and as such are subject to the applicable yield restriction and arbitrage rebate rules pending their use as described above.

Example 2.- Disposition proceeds are greater than the principal amount of the outstanding bonds allocated to the sold property.

Issuer issues $10 million of bonds to finance a school and land. Issuer subsequently sells a portion of the land for $3 million. At this time, all $10 million of the bonds are still outstanding. The principal amount of outstanding bonds allocated to the sold property is $2 million. If the issuer chooses to remediate by redeeming bonds, it must redeem $2 million of outstanding bonds leaving the issuer with $1 million of gross proceeds.

Or, the issuer could remediate by using the alternative use of disposition proceeds option. If so, the Issuer must apply the total amount of the disposition proceeds, $3 million, to a qualifying use within two years (or use a combination of the alternative use of disposition proceeds and redemption or defeasance options).

The disposition proceeds are considered gross proceeds of the bonds and as such are subject to the applicable yield restriction and arbitrage rebate rules pending their use as described above.

Example 3. - Disposition proceeds are greater than the principal amount of the outstanding bonds allocated to the sold property and the conduit borrower finances the project in part with tax-exempt bond proceeds and in part with an equity contribution.

A 501(c)(3) conduit borrower contributed $4 million of cash from its revenues and used $6 million of tax-exempt bonds to finance a $10 million acquisition of a continuing care facility. Subsequently, the conduit borrower sells the facility for $12 million. At this time, all $6 million of the bonds are still outstanding. Thus the issuer has $6 million of nonqualified bonds. The issuer may remediate by either redeeming all of the $6 million nonqualified bonds or by requiring the conduit borrower to use $12 million of disposition proceeds for an alternative use within two years (provided all requirements of qualified 501(c)(3) bonds are met).

Of the $12 million of disposition proceeds, $6 million are considered gross proceeds of the bonds and as such are subject to the applicable yield restriction and arbitrage rebate rules pending their use as described above.

Gross Proceeds - Example 2 versus Example 3

When the tax-exempt bond financed property is sold for an amount in excess of the principal amount of the outstanding bonds allocated to that property, a different result occurs with respect to that excess amount depending on whether all the bonds of the issue have been redeemed. In Example 3, where the issuer redeemed all of the outstanding bonds, the remaining disposition proceeds are not gross proceeds of the bonds and, therefore, are no longer subject to the federal tax restrictions. This is because the amount of gross proceeds cannot exceed the amount of the outstanding bonds of the issue. Whereas in Example 2, although the issuer has redeemed the nonqualified bonds, the issuer still has bonds of the issue outstanding and thus the additional disposition proceeds are gross proceeds of the bonds and subject to the applicable yield restriction and arbitrage rebate rules pending their use.

Correction of Violations Using TEB Voluntary Closing Agreement Program (VCAP)

If an issuer or conduit borrower discovers that it has sold bond financed assets causing the applicable private business tests to be met but is ineligible to self-correct through a remedial action provision, TEB encourages the issuer to take advantage of its Voluntary Closing Agreement Program (TEB VCAP) to resolve federal tax violations relating to bonds as described in Notice 2008-31 and IRM section 7.2.3.

Page Last Reviewed or Updated: 04-Sep-2013

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