Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

Printable Tax Form 1040x

Where Can I Get State Tax FormsAmended TaxDownload 1040xMypay Dfas MilTax Return 2012 FormForm 1040nrMilitary TaxPast Year TaxesFederal Tax Return AmendmentHow To File 2010 Taxes Online For FreeTurbotax Free For Military 2012Irs Federal Tax Tables 2011How Can I File My State Taxes For FreeH&r Block Free File ReviewHow Do I Refile My Taxes2010 Federal Tax Forms And InstructionsFile 2011 Taxes Online H&r BlockFree Online Taxes 2012File My 2009 Taxes Online FreeAmended Us Individual Income Tax Return2010 Free Tax FilingWhere Can I File My 2011 Taxes For FreeTaxesFiling State Taxes OnlyFile Taxes For 2012 FreeFree Tax Software For 2012Free Tax Filing Online State And FederalCorporation Tax SoftwareTaxaid ComAmending TaxesIrs Tax Forms 20112010 1040 Tax FormAmend 2011 TaxesFiling Late ReturnsForm 1040x Amended ReturnFreefillableformsFile 2008 Taxes For FreeState Tax File For FreeFiling A Tax Amendment1040 Tax Form 2010

Printable Tax Form 1040x

Printable tax form 1040x Publication 551 - Main Content Table of Contents Cost BasisStocks and Bonds Real Property Business Assets Allocating the Basis Adjusted BasisIncreases to Basis Decreases to Basis Adjustments to Basis Example Basis Other Than CostProperty Received for Services Taxable Exchanges Nontaxable Exchanges Property Transferred From a Spouse Property Received as a Gift Inherited Property Property Changed to Business or Rental Use How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Printable tax form 1040x Cost Basis The basis of property you buy is usually its cost. Printable tax form 1040x The cost is the amount you pay in cash, debt obligations, other property, or services. Printable tax form 1040x Your cost also includes amounts you pay for the following items. Printable tax form 1040x 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 assumed for the seller). Printable tax form 1040x  You may also have to capitalize (add to basis) certain other costs related to buying or producing property. Printable tax form 1040x Loans with low or no interest. Printable tax form 1040x   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 the amount considered to be unstated interest. Printable tax form 1040x You generally have unstated interest if your interest rate is less than the applicable federal rate. Printable tax form 1040x For more information, see Unstated Interest and Original Issue Discount in Publication 537. Printable tax form 1040x Purchase of a business. Printable tax form 1040x   When you purchase a trade or business, you generally purchase all assets used in the business operations, such as land, buildings, and machinery. Printable tax form 1040x Allocate the price among the various assets, including any section 197 intangibles. Printable tax form 1040x See Allocating the Basis, later. Printable tax form 1040x Stocks and Bonds The basis of stocks or bonds you buy is generally the purchase price plus any costs of purchase, such as commissions and recording or transfer fees. Printable tax form 1040x If you get stocks or bonds other than by purchase, your basis is usually determined by the fair market value (FMV) or the previous owner's adjusted basis of the stock. Printable tax form 1040x You must adjust the basis of stocks for certain events that occur after purchase. Printable tax form 1040x See Stocks and Bonds in chapter 4 of Publication 550 for more information on the basis of stock. Printable tax form 1040x Identifying stock or bonds sold. Printable tax form 1040x   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 stock or bonds. Printable tax form 1040x 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. Printable tax form 1040x For more information about identifying securities you sell, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. Printable tax form 1040x Mutual fund shares. Printable tax form 1040x   If you sell mutual fund shares acquired at different times and prices, you can choose to use an average basis. Printable tax form 1040x For more information, see Publication 550. Printable tax form 1040x Real Property Real property, also called real estate, is land and generally anything built on or attached to it. Printable tax form 1040x If you buy real property, certain fees and other expenses become part of your cost basis in the property. Printable tax form 1040x Real estate taxes. Printable tax form 1040x   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. Printable tax form 1040x You cannot deduct them as taxes. Printable tax form 1040x   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. Printable tax form 1040x Do not include that amount in the basis of the property. Printable tax form 1040x If you did not reimburse the seller, you must reduce your basis by the amount of those taxes. Printable tax form 1040x Settlement costs. Printable tax form 1040x   Your basis includes the settlement fees and closing costs for buying property. Printable tax form 1040x You cannot include in your basis the fees and costs for getting a loan on property. Printable tax form 1040x A fee for buying property is a cost that must be paid even if you bought the property for cash. Printable tax form 1040x   The following items are some of the settlement fees or closing costs you can include in the basis of your property. Printable tax form 1040x Abstract fees (abstract of title fees); Charges for installing utility services; Legal fees (including title search and preparation of the sales contract and deed); Recording fees; Surveys; Transfer taxes; Owner's title insurance; and 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. Printable tax form 1040x   Settlement costs do not include amounts placed in escrow for the future payment of items such as taxes and insurance. Printable tax form 1040x   The following items are some settlement fees and closing costs you cannot include in the basis of the property. Printable tax form 1040x Casualty insurance premiums. Printable tax form 1040x Rent for occupancy of the property before closing. Printable tax form 1040x Charges for utilities or other services related to occupancy of the property before closing. Printable tax form 1040x Charges connected with getting a loan. Printable tax form 1040x The following are examples of these charges. Printable tax form 1040x Points (discount points, loan origination fees). Printable tax form 1040x Mortgage insurance premiums. Printable tax form 1040x Loan assumption fees. Printable tax form 1040x Cost of a credit report. Printable tax form 1040x Fees for an appraisal required by a lender. Printable tax form 1040x Fees for refinancing a mortgage. Printable tax form 1040x If these costs relate to business property, items (1) through (3) are deductible as business expenses. Printable tax form 1040x Items (4) and (5) must be capitalized as costs of getting a loan and can be deducted over the period of the loan. Printable tax form 1040x Points. Printable tax form 1040x   If you pay points to obtain 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. Printable tax form 1040x Generally, you deduct the points over the term of the loan. Printable tax form 1040x For more information on how to deduct points, see Points in chapter 4 of Publication 535. Printable tax form 1040x Points on home mortgage. Printable tax form 1040x   Special rules may apply to points you and the seller pay when you obtain a mortgage to purchase your main home. Printable tax form 1040x If certain requirements are met, you can deduct the points in full for the year in which they are paid. Printable tax form 1040x Reduce the basis of your home by any seller-paid points. Printable tax form 1040x For more information, see Points in Publication 936, Home Mortgage Interest Deduction. Printable tax form 1040x Assumption of mortgage. Printable tax form 1040x   If you buy property and assume (or buy 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. Printable tax form 1040x Example. Printable tax form 1040x If you buy a building for $20,000 cash and assume a mortgage of $80,000 on it, your basis is $100,000. Printable tax form 1040x Constructing assets. Printable tax form 1040x   If you build property or have assets built for you, your expenses for this construction are part of your basis. Printable tax form 1040x Some of these expenses include the following costs. Printable tax form 1040x Land, Labor and materials, Architect's fees, Building permit charges, Payments to contractors, Payments for rental equipment, and Inspection fees. Printable tax form 1040x In addition, if you own a business and use your employees, material, and equipment to build an asset, do not deduct the following expenses. Printable tax form 1040x You must include them in the asset's basis. Printable tax form 1040x Employee wages paid for the construction work, reduced by any employment credits allowed; Depreciation on equipment you own while it is used in the construction; Operating and maintenance costs for equipment used in the construction; and The cost of business supplies and materials used in the construction. Printable tax form 1040x    Do not include the value of your own labor, or any other labor you did not pay for, in the basis of any property you construct. Printable tax form 1040x Business Assets If you purchase property to use in your business, your basis is usually its actual cost to you. Printable tax form 1040x If you construct, create, or otherwise produce property, you must capitalize the costs as your basis. Printable tax form 1040x In certain circumstances, you may be subject to the uniform capitalization rules, next. Printable tax form 1040x Uniform Capitalization Rules The uniform capitalization rules specify the costs you add to basis in certain circumstances. Printable tax form 1040x Activities subject to the rules. Printable tax form 1040x   You must use the uniform capitalization rules if you do any of the following in your trade or business or activity carried on for profit. Printable tax form 1040x Produce real or tangible personal property for use in the business or activity, Produce real or tangible personal property for sale to customers, or Acquire property for resale. Printable tax form 1040x However, this rule does not apply to personal property if your average annual gross receipts for the 3 previous tax years are $10 million or less. Printable tax form 1040x   You produce property if you construct, build, install, manufacture, develop, improve, create, raise, or grow the property. Printable tax form 1040x Treat property produced for you under a contract as produced by you up to the amount you pay or costs you otherwise incur for the property. Printable tax form 1040x Tangible personal property includes films, sound recordings, video tapes, books, or similar property. Printable tax form 1040x    Under the uniform capitalization rules, you must capitalize all direct costs and an allocable part of most indirect costs you incur due to your production or resale activities. Printable tax form 1040x To capitalize means to include certain expenses in the basis of property you produce or in your inventory costs rather than deduct them as a current expense. Printable tax form 1040x You recover these costs through deductions for depreciation, amortization, or cost of goods sold when you use, sell, or otherwise dispose of the property. Printable tax form 1040x   Any cost you cannot use to figure your taxable income for any tax year is not subject to the uniform capitalization rules. Printable tax form 1040x Example. Printable tax form 1040x If you incur a business meal expense for which your deduction would be limited to 50% of the cost of the meal, that amount is subject to the uniform capitalization rules. Printable tax form 1040x The nondeductible part of the cost is not subject to the uniform capitalization rules. Printable tax form 1040x More information. Printable tax form 1040x   For more information about these rules, see the regulations under section 263A of the Internal Revenue Code and Publication 538, Accounting Periods and Methods. Printable tax form 1040x Exceptions. Printable tax form 1040x   The following are not subject to the uniform capitalization rules. Printable tax form 1040x Property you produce that you do not use in your trade, business, or activity conducted for profit; Qualified creative expenses you pay or incur as a free-lance (self-employed) writer, photographer, or artist that are otherwise deductible on your tax return; Property you produce under a long-term contract, except for certain home construction contracts; Research and experimental expenses deductible under section 174 of the Internal Revenue Code; and Costs for personal property acquired for resale if your (or your predecessor's) average annual gross receipts for the 3 previous tax years do not exceed $10 million. Printable tax form 1040x For other exceptions to the uniform capitalization rules, see section 1. Printable tax form 1040x 263A-1(b) of the regulations. Printable tax form 1040x   For information on the special rules that apply to costs incurred in the business of farming, see chapter 6 of Publication 225, Farmer's Tax Guide. Printable tax form 1040x Intangible Assets Intangible assets include goodwill, patents, copyrights, trademarks, trade names, and franchises. Printable tax form 1040x The basis of an intangible asset is usually the cost to buy or create it. Printable tax form 1040x If you acquire multiple assets, for example a going business for a lump sum, see Allocating the Basis below to figure the basis of the individual assets. Printable tax form 1040x The basis of certain intangibles can be amortized. Printable tax form 1040x See chapter 8 of Publication 535 for information on the amortization of these costs. Printable tax form 1040x Patents. Printable tax form 1040x   The basis of a patent you get for an invention is the cost of development, such as research and experimental expenditures, drawings, working models, and attorneys' and governmental fees. Printable tax form 1040x If you deduct the research and experimental expenditures as current business expenses, you cannot include them in the basis of the patent. Printable tax form 1040x The value of the inventor's time spent on an invention is not part of the basis. Printable tax form 1040x Copyrights. Printable tax form 1040x   If you are an author, the basis of a copyright will usually be the cost of getting the copyright plus copyright fees, attorneys' fees, clerical assistance, and the cost of plates that remain in your possession. Printable tax form 1040x Do not include the value of your time as the author, or any other person's time you did not pay for. Printable tax form 1040x Franchises, trademarks, and trade names. Printable tax form 1040x   If you buy a franchise, trademark, or trade name, the basis is its cost, unless you can deduct your payments as a business expense. Printable tax form 1040x Allocating the Basis If you buy multiple assets for a lump sum, allocate the amount you pay among the assets you receive. Printable tax form 1040x You must make this allocation to figure your basis for depreciation and gain or loss on a later disposition of any of these assets. Printable tax form 1040x See Trade or Business Acquired below. Printable tax form 1040x Group of Assets Acquired If you buy multiple assets for a lump sum, you and the seller may agree to a specific allocation of the purchase price among the assets in the sales contract. Printable tax form 1040x If this allocation is based on the value of each asset and you and the seller have adverse tax interests, the allocation generally will be accepted. Printable tax form 1040x However, see Trade or Business Acquired, next. Printable tax form 1040x Trade or Business Acquired If you acquire a trade or business, allocate the consideration paid to the various assets acquired. Printable tax form 1040x Generally, reduce the consideration paid by any cash and general deposit accounts (including checking and savings accounts) received. Printable tax form 1040x Allocate the remaining consideration to the other business assets received in proportion to (but not more than) their fair market value in the following order. Printable tax form 1040x Certificates of deposit, U. Printable tax form 1040x S. Printable tax form 1040x Government securities, foreign currency, and actively traded personal property, including stock and securities. Printable tax form 1040x Accounts receivable, other debt instruments, and assets you mark to market at least annually for federal income tax purposes. Printable tax form 1040x Property of a kind that would properly be included in inventory if on hand at the end of the tax year or property held primarily for sale to customers in the ordinary course of business. Printable tax form 1040x All other assets except section 197 intangibles, goodwill, and going concern value. Printable tax form 1040x Section 197 intangibles except goodwill and going concern value. Printable tax form 1040x Goodwill and going concern value (whether or not they qualify as section 197 intangibles). Printable tax form 1040x Agreement. Printable tax form 1040x   The buyer and seller may enter into a written agreement as to the allocation of any consideration or the fair market value (FMV) of any of the assets. Printable tax form 1040x This agreement is binding on both parties unless the IRS determines the amounts are not appropriate. Printable tax form 1040x Reporting requirement. Printable tax form 1040x   Both the buyer and seller involved in the sale of business assets must report to the IRS the allocation of the sales price among section 197 intangibles and the other business assets. Printable tax form 1040x Use Form 8594 to provide this information. Printable tax form 1040x The buyer and seller should each attach Form 8594 to their federal income tax return for the year in which the sale occurred. Printable tax form 1040x More information. Printable tax form 1040x   See Sale of a Business in chapter 2 of Publication 544 for more information. Printable tax form 1040x Land and Buildings If you buy buildings and the land on which they stand for a lump sum, allocate the basis of the property among the land and the buildings so you can figure the depreciation allowable on the buildings. Printable tax form 1040x Figure the basis of each asset by multiplying the lump sum by a fraction. Printable tax form 1040x The numerator is the FMV of that asset and the denominator is the FMV of the whole property at the time of purchase. Printable tax form 1040x If you are not certain of the FMV of the land and buildings, you can allocate the basis based on their assessed values for real estate tax purposes. Printable tax form 1040x Demolition of building. Printable tax form 1040x   Add demolition costs and other losses incurred for the demolition of any building to the basis of the land on which the demolished building was located. Printable tax form 1040x Do not claim the costs as a current deduction. Printable tax form 1040x Modification of building. Printable tax form 1040x   A modification of a building will not be treated as a demolition if the following conditions are satisfied. Printable tax form 1040x 75 percent or more of the existing external walls of the building are retained in place as internal or external walls, and 75 percent or more of the existing internal structural framework of the building is retained in place. Printable tax form 1040x   If the building is a certified historic structure, the modification must also be part of a certified rehabilitation. Printable tax form 1040x   If these conditions are met, add the costs of the modifications to the basis of the building. Printable tax form 1040x Subdivided lots. Printable tax form 1040x   If you buy a tract of land and subdivide it, you must determine the basis of each lot. Printable tax form 1040x This is necessary because you must figure the gain or loss on the sale of each individual lot. Printable tax form 1040x As a result, you do not recover your entire cost in the tract until you have sold all of the lots. Printable tax form 1040x   To determine the basis of an individual lot, multiply the total cost of the tract by a fraction. Printable tax form 1040x The numerator is the FMV of the lot and the denominator is the FMV of the entire tract. Printable tax form 1040x Future improvement costs. Printable tax form 1040x   If you are a developer and sell subdivided lots before the development work is completed, you can (with IRS consent) include in the basis of the properties sold an allocation of the estimated future cost for common improvements. Printable tax form 1040x See Revenue Procedure 92–29 for more information, including an explanation of the procedures for getting consent from the IRS. Printable tax form 1040x Use of erroneous cost basis. Printable tax form 1040x   If you made a mistake in figuring the cost basis of subdivided lots sold in previous years, you cannot correct the mistake for years for which the statute of limitations (generally 3 tax years) has expired. Printable tax form 1040x Figure the basis of any remaining lots by allocating the correct original cost basis of the entire tract among the original lots. Printable tax form 1040x Example. Printable tax form 1040x You bought a tract of land to which you assigned a cost of $15,000. Printable tax form 1040x You subdivided the land into 15 building lots of equal size and equitably divided your basis so that each lot had a basis of $1,000. Printable tax form 1040x You treated the sale of each lot as a separate transaction and figured gain or loss separately on each sale. Printable tax form 1040x Several years later you determine that your original basis in the tract was $22,500 and not $15,000. Printable tax form 1040x You sold eight lots using $8,000 of basis in years for which the statute of limitations has expired. Printable tax form 1040x You now can take $1,500 of basis into account for figuring gain or loss only on the sale of each of the remaining seven lots ($22,500 basis divided among all 15 lots). Printable tax form 1040x You cannot refigure the basis of the eight lots sold in tax years barred by the statute of limitations. Printable tax form 1040x 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 to the basis of the property. Printable tax form 1040x The result of these adjustments to the basis is the adjusted basis. Printable tax form 1040x Increases to Basis Increase the basis of any property by all items properly added to a capital account. Printable tax form 1040x These include the cost of any improvements having a useful life of more than 1 year. Printable tax form 1040x Rehabilitation expenses also increase basis. Printable tax form 1040x However, you must subtract any rehabilitation credit allowed for these expenses before you add them to your basis. Printable tax form 1040x If you have to recapture any of the credit, increase your basis by the recaptured amount. Printable tax form 1040x If you make additions or improvements to business property, keep separate accounts for them. Printable tax form 1040x Also, you must depreciate the basis of each according to the depreciation rules that would apply to the underlying property if you had placed it in service at the same time you placed the addition or improvement in service. Printable tax form 1040x For more information, see Publication 946. Printable tax form 1040x The following items increase the basis of property. Printable tax form 1040x The cost of extending utility service lines to the property; Impact fees; Legal fees, such as the cost of defending and perfecting title; Legal fees for obtaining a decrease in an assessment levied against property to pay for local improvements; Zoning costs; and The capitalized value of a redeemable ground rent. Printable tax form 1040x Assessments for Local Improvements Increase the basis of property by assessments for items such as paving roads and building ditches that increase the value of the property assessed. Printable tax form 1040x Do not deduct them as taxes. Printable tax form 1040x However, you can deduct as taxes charges for maintenance, repairs, or interest charges related to the improvements. Printable tax form 1040x Example. Printable tax form 1040x Your city changes the street in front of your store into an enclosed pedestrian mall and assesses you and other affected landowners for the cost of the conversion. Printable tax form 1040x Add the assessment to your property's basis. Printable tax form 1040x In this example, the assessment is a depreciable asset. Printable tax form 1040x Deducting vs. Printable tax form 1040x Capitalizing Costs Do not add to your basis costs you can deduct as current expenses. Printable tax form 1040x For example, amounts paid for incidental repairs or maintenance that are deductible as business expenses cannot be added to basis. Printable tax form 1040x However, you can choose either to deduct or to capitalize certain other costs. Printable tax form 1040x If you capitalize these costs, include them in your basis. Printable tax form 1040x If you deduct them, do not include them in your basis. Printable tax form 1040x See Uniform Capitalization Rules earlier. Printable tax form 1040x The costs you can choose to deduct or to capitalize include the following. Printable tax form 1040x Carrying charges, such as interest and taxes, that you pay to own property, except carrying charges that must be capitalized under the uniform capitalization rules; Research and experimentation costs; Intangible drilling and development costs for oil, gas, and geothermal wells; Exploration costs for new mineral deposits; Mining development costs for a new mineral deposit; Costs of establishing, maintaining, or increasing the circulation of a newspaper or other periodical; and Costs of removing architectural and transportation barriers to people with disabilities and the elderly. Printable tax form 1040x If you claim the disabled access credit, you must reduce the amount you deduct or capitalize by the amount of the credit. Printable tax form 1040x For more information about deducting or capitalizing costs, see chapter 7 in Publication 535. Printable tax form 1040x Table 1. Printable tax form 1040x Examples of Increases and Decreases to Basis Increases to Basis Decreases to Basis Capital improvements:   Putting an addition on your home   Replacing an entire roof  Paving your driveway  Installing central air conditioning Rewiring your home Exclusion from income of subsidies for energy conservation measures  Casualty or theft loss deductions and insurance reimbursements  Vehicle credits Assessments for local improvements: Water connections Sidewalks Roads Section 179 deduction  Casualty losses: Restoring damaged property Depreciation  Nontaxable corporate distributions Legal fees:  Cost of defending and perfecting a title   Zoning costs   Decreases to Basis The following are some items that reduce the basis of property. Printable tax form 1040x Section 179 deduction; Nontaxable corporate distributions; Deductions previously allowed (or allowable) for amortization, depreciation, and depletion; Exclusion of subsidies for energy conservation measures; Vehicle credits; Residential energy credits; Postponed gain from sale of home; Investment credit (part or all) taken; Casualty and theft losses and insurance reimbursement; Certain canceled debt excluded from income; Rebates from a manufacturer or seller; Easements; Gas-guzzler tax; Adoption tax benefits; and Credit for employer-provided child care. Printable tax form 1040x Some of these items are discussed next. Printable tax form 1040x Casualties and Thefts If you have a casualty or theft loss, decrease the basis in your property by any insurance or other reimbursement and by any deductible loss not covered by insurance. Printable tax form 1040x You must increase your basis in the property by the amount you spend on repairs that substantially prolong the life of the property, increase its value, or adapt it to a different use. Printable tax form 1040x To make this determination, compare the repaired property to the property before the casualty. Printable tax form 1040x For more information on casualty and theft losses, see Publication 547, Casualties, Disasters, and Thefts. Printable tax form 1040x Easements The amount you receive for granting an easement is generally considered to be a sale of an interest in real property. Printable tax form 1040x It reduces the basis of the affected part of the property. Printable tax form 1040x 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. Printable tax form 1040x Vehicle Credits Unless you elect not to claim the qualified plug-in electric vehicle credit, the alternative motor vehicle credit, or the qualified plug-in electric drive motor vehicle credit, you may have to reduce the basis of each qualified vehicle by certain amounts reported. Printable tax form 1040x For more information, see Form 8834, Qualified Plug-in Electric and Electric Vehicle Credit; Form 8910, Alternative Motor Vehicle Credit; Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit;and the related instructions. Printable tax form 1040x Gas-Guzzler Tax Decrease the basis in your car by the gas-guzzler (fuel economy) tax if you begin using the car within 1 year of the date of its first sale for ultimate use. Printable tax form 1040x This rule also applies to someone who later buys the car and begins using it not more than 1 year after the original sale for ultimate use. Printable tax form 1040x If the car is imported, the one-year period begins on the date of entry or withdrawal of the car from the warehouse if that date is later than the date of the first sale for ultimate use. Printable tax form 1040x Section 179 Deduction If you take the section 179 deduction for all or part of the cost of qualifying business property, decrease the basis of the property by the deduction. Printable tax form 1040x For more information about the section 179 deduction, see Publication 946. Printable tax form 1040x Exclusion of Subsidies for Energy Conservation Measures You can exclude from gross income any subsidy you received from a public utility company for the purchase or installation of any energy conservation measure for a dwelling unit. Printable tax form 1040x Reduce the basis of the property for which you received the subsidy by the excluded amount. Printable tax form 1040x For more information on this subsidy, see Publication 525. Printable tax form 1040x Depreciation Decrease the basis of property by the depreciation you deducted, or could have deducted, on your tax returns under the method of depreciation you chose. Printable tax form 1040x If you took less depreciation than you could have under the method chosen, decrease the basis by the amount you could have taken under that method. Printable tax form 1040x If you did not take a depreciation deduction, reduce the basis by the full amount of the depreciation you could have taken. Printable tax form 1040x Unless a timely election is made not to deduct the special depreciation allowance for property placed in service after September 10, 2001, decrease the property's basis by the special depreciation allowance you deducted or could have deducted. Printable tax form 1040x If you deducted more depreciation than you should have, decrease your basis by the amount equal to the depreciation you should have deducted plus the part of the excess depreciation you deducted that actually reduced your tax liability for the year. Printable tax form 1040x In decreasing your basis for depreciation, take into account the amount deducted on your tax returns as depreciation and any depreciation capitalized under the uniform capitalization rules. Printable tax form 1040x For information on figuring depreciation, see Publication 946. Printable tax form 1040x If you are claiming depreciation on a business vehicle, see Publication 463. Printable tax form 1040x If the car is not used more than 50% for business during the tax year, you may have to recapture excess depreciation. Printable tax form 1040x Include the excess depreciation in your gross income and add it to your basis in the property. Printable tax form 1040x For information on the computation of excess depreciation, see chapter 4 in Publication 463. Printable tax form 1040x Canceled Debt Excluded From Income If a debt you owe is canceled or forgiven, other than as a gift or bequest, you generally must include the canceled amount in your gross income for tax purposes. Printable tax form 1040x A debt includes any indebtedness for which you are liable or which attaches to property you hold. Printable tax form 1040x You can exclude canceled debt from income in the following situations. Printable tax form 1040x Debt canceled in a bankruptcy case or when you are insolvent, Qualified farm debt, and Qualified real property business debt (provided you are not a C corporation). Printable tax form 1040x If you exclude from income canceled debt under situation (1) or (2), you may have to reduce the basis of your depreciable and nondepreciable property. Printable tax form 1040x However, in situation (3), you must reduce the basis of your depreciable property by the excluded amount. Printable tax form 1040x For more information about canceled debt in a bankruptcy case or during insolvency, see Publication 908, Bankruptcy Tax Guide. Printable tax form 1040x For more information about canceled debt that is qualified farm debt, see chapter 3 in Publication 225. Printable tax form 1040x For more information about qualified real property business debt, see chapter 5 in Publication 334, Tax Guide for Small Business. Printable tax form 1040x Postponed Gain From Sale of Home If you postponed gain from the sale of your main home before May 7, 1997, you must reduce the basis of your new home by the postponed gain. Printable tax form 1040x For more information on the rules for the sale of a home, see Publication 523. Printable tax form 1040x Adoption Tax Benefits If you claim an adoption credit for the cost of improvements you added to the basis of your home, decrease the basis of your home by the credit allowed. Printable tax form 1040x This also applies to amounts you received under an employer's adoption assistance program and excluded from income. Printable tax form 1040x For more information Form 8839, Qualified Adoption Expenses. Printable tax form 1040x Employer-Provided Child Care If you are an employer, you can claim the employer-provided child care credit on amounts you paid or incurred to acquire, construct, rehabilitate, or expand property used as part of your qualified child care facility. Printable tax form 1040x You must reduce your basis in that property by the credit claimed. Printable tax form 1040x For more information, see Form 8882, Credit for Employer-Provided Child Care Facilities and Services. Printable tax form 1040x Adjustments to Basis Example In January 2005, you paid $80,000 for real property to be used as a factory. Printable tax form 1040x You also paid commissions of $2,000 and title search and legal fees of $600. Printable tax form 1040x You allocated the total cost of $82,600 between the land and the building—$10,325 for the land and $72,275 for the building. Printable tax form 1040x Immediately you spent $20,000 in remodeling the building before you placed it in service. Printable tax form 1040x You were allowed depreciation of $14,526 for the years 2005 through 2009. Printable tax form 1040x In 2008 you had a $5,000 casualty loss from a that was not covered by insurance on the building. Printable tax form 1040x You claimed a deduction for this loss. Printable tax form 1040x You spent $5,500 to repair the damages and extend the useful life of the building. Printable tax form 1040x The adjusted basis of the building on January 1, 2010, is figured as follows: Original cost of building including fees and commissions $72,275 Adjustments to basis:     Add:         Improvements 20,000   Repair of damages 5,500       $97,775 Subtract:       Depreciation $14,526     Deducted casualty loss 5,000 19,526 Adjusted basis on January 1, 2010 $78,249 The basis of the land, $10,325, remains unchanged. Printable tax form 1040x It is not affected by any of the above adjustments. Printable tax form 1040x Basis Other Than Cost There are many times when you cannot use cost as basis. Printable tax form 1040x In these cases, the fair market value or the adjusted basis of property may be used. Printable tax form 1040x Adjusted basis is discussed earlier. Printable tax form 1040x Fair market value (FMV). Printable tax form 1040x   FMV is the price at which property would change hands between a buyer and a seller, neither having to buy or sell, and both having reasonable knowledge of all necessary facts. Printable tax form 1040x Sales of similar property on or about the same date may be helpful in figuring the property's FMV. Printable tax form 1040x Property Received for Services If you receive property for services, include the property's FMV in income. Printable tax form 1040x The amount you include in income becomes your basis. Printable tax form 1040x 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. Printable tax form 1040x Bargain Purchases A bargain purchase is a purchase of an item for less than its FMV. Printable tax form 1040x If, as compensation for services, you purchase goods or other property at less than FMV, include the difference between the purchase price and the property's FMV in your income. Printable tax form 1040x Your basis in the property is its FMV (your purchase price plus the amount you include in income). Printable tax form 1040x If the difference between your purchase price and the FMV represents a qualified employee discount, do not include the difference in income. Printable tax form 1040x However, your basis in the property is still its FMV. Printable tax form 1040x See Employee Discounts in Publication 15-B. Printable tax form 1040x Restricted Property 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 unless you make the election discussed later. Printable tax form 1040x Property becomes substantially vested when your rights in the property or the rights of any person to whom you transfer the property are not subject to a substantial risk of forfeiture. Printable tax form 1040x There is substantial risk of forfeiture when the rights to full enjoyment of the property depend on the future performance of substantial services by any person. Printable tax form 1040x When the property becomes substantially vested, include the FMV, less any amount you paid for the property, in income. Printable tax form 1040x Example. Printable tax form 1040x Your employer gives you stock for services performed under the condition that you will have to return the stock unless you complete 5 years of service. Printable tax form 1040x The stock is under a substantial risk of forfeiture and is not substantially vested when you receive it. Printable tax form 1040x You do not report any income until you have completed the 5 years of service that satisfy the condition. Printable tax form 1040x Fair market value. Printable tax form 1040x   Figure the FMV of property you received without considering any restriction except one that by its terms will never end. Printable tax form 1040x Example. Printable tax form 1040x You received stock from your employer for services you performed. Printable tax form 1040x If you want to sell the stock while you are still employed, you must sell the stock to your employer at book value. Printable tax form 1040x At your retirement or death, you or your estate must offer to sell the stock to your employer at its book value. Printable tax form 1040x This is a restriction that by its terms will never end and you must consider it when you figure the FMV. Printable tax form 1040x Election. Printable tax form 1040x   You can choose to include in your gross income the FMV of the property at the time of transfer, less any amount you paid for it. Printable tax form 1040x If you make this choice, the substantially vested rules do not apply. Printable tax form 1040x Your basis is the amount you paid plus the amount you included in income. Printable tax form 1040x   See the discussion of Restricted Property in Publication 525 for more information. Printable tax form 1040x Taxable Exchanges A taxable exchange is one in which the gain is taxable or the loss is deductible. Printable tax form 1040x A taxable gain or deductible loss is also known as a recognized gain or loss. Printable tax form 1040x If you receive property in exchange for other property in a taxable exchange, the basis of property you receive is usually its FMV at the time of the exchange. Printable tax form 1040x A taxable exchange occurs when you receive cash or property not similar or related in use to the property exchanged. Printable tax form 1040x Example. Printable tax form 1040x You trade a tract of farm land with an adjusted basis of $3,000 for a tractor that has an FMV of $6,000. Printable tax form 1040x You must report a taxable gain of $3,000 for the land. Printable tax form 1040x The tractor has a basis of $6,000. Printable tax form 1040x Involuntary Conversions If you receive property as a result of an involuntary conversion, such as a casualty, theft, or condemnation, you can figure the basis of the replacement property you receive using the basis of the converted property. Printable tax form 1040x Similar or related property. Printable tax form 1040x   If you receive replacement property similar or related in service or use to the converted property, the replacement property's basis is the old property's basis on the date of the conversion. Printable tax form 1040x However, make the following adjustments. Printable tax form 1040x Decrease the basis by the following. Printable tax form 1040x Any loss you recognize on the conversion, and Any money you receive that you do not spend on similar property. Printable tax form 1040x Increase the basis by the following. Printable tax form 1040x Any gain you recognize on the conversion, and Any cost of acquiring the replacement property. Printable tax form 1040x Money or property not similar or related. Printable tax form 1040x   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 new property is its cost decreased by the gain not recognized on the conversion. Printable tax form 1040x Example. Printable tax form 1040x The state condemned your property. Printable tax form 1040x The property had an adjusted basis of $26,000 and the state paid you $31,000 for it. Printable tax form 1040x You realized a gain of $5,000 ($31,000 − $26,000). Printable tax form 1040x You bought replacement property similar in use to the converted property for $29,000. Printable tax form 1040x You recognize a gain of $2,000 ($31,000 − $29,000), the unspent part of the payment from the state. Printable tax form 1040x Your gain not recognized is $3,000, the difference between the $5,000 realized gain and the $2,000 recognized gain. Printable tax form 1040x The basis of the new property is figured as follows: Cost of replacement property $29,000 Minus: Gain not recognized 3,000 Basis of the replacement property $26,000 Allocating the basis. Printable tax form 1040x   If you buy more than one piece of replacement property, allocate your basis among the properties based on their respective costs. Printable tax form 1040x Example. Printable tax form 1040x The state in the previous example condemned your unimproved real property and the replacement property you bought was improved real property with both land and buildings. Printable tax form 1040x Allocate the replacement property's $26,000 basis between land and buildings based on their respective costs. Printable tax form 1040x More information. Printable tax form 1040x   For more information about condemnations, see Involuntary Conversions in Publication 544. Printable tax form 1040x For more information about casualty and theft losses, see Publication 547. Printable tax form 1040x Nontaxable Exchanges A nontaxable exchange is an exchange in which you are not taxed on any gain and you cannot deduct any loss. Printable tax form 1040x If you receive property in a nontaxable exchange, its basis is usually the same as the basis of the property you transferred. Printable tax form 1040x A nontaxable gain or loss is also known as an unrecognized gain or loss. Printable tax form 1040x Like-Kind Exchanges The exchange of property for the same kind of property is the most common type of nontaxable exchange. Printable tax form 1040x To qualify as a like-kind exchange, you must hold for business or investment purposes both the property you transfer and the property you receive. Printable tax form 1040x There must also be an exchange of like-kind property. Printable tax form 1040x For more information, see Like-Kind Exchanges in Publication 544. Printable tax form 1040x The basis of the property you receive is the same as the basis of the property you gave up. Printable tax form 1040x Example. Printable tax form 1040x You exchange real estate (adjusted basis $50,000, FMV $80,000) held for investment for other real estate (FMV $80,000) held for investment. Printable tax form 1040x Your basis in the new property is the same as the basis of the old ($50,000). Printable tax form 1040x Exchange expenses. Printable tax form 1040x   Exchange expenses are generally the closing costs you pay. Printable tax form 1040x They include such items as brokerage commissions, attorney fees, deed preparation fees, etc. Printable tax form 1040x Add them to the basis of the like-kind property received. Printable tax form 1040x Property plus cash. Printable tax form 1040x   If you trade property in a like-kind exchange and also pay money, the basis of the property received is the basis of the property you gave up increased by the money you paid. Printable tax form 1040x Example. Printable tax form 1040x You trade in a truck (adjusted basis $3,000) for another truck (FMV $7,500) and pay $4,000. Printable tax form 1040x Your basis in the new truck is $7,000 (the $3,000 basis of the old truck plus the $4,000 paid). Printable tax form 1040x Special rules for related persons. Printable tax form 1040x   If a like-kind exchange takes place directly or indirectly between related persons and either party disposes of the property within 2 years after the exchange, the exchange no longer qualifies for like-kind exchange treatment. Printable tax form 1040x Each person must report any gain or loss not recognized on the original exchange. Printable tax form 1040x Each person reports it on the tax return filed for the year in which the later disposition occurs. Printable tax form 1040x If this rule applies, the basis of the property received in the original exchange will be its fair market value. Printable tax form 1040x   These rules generally do not apply to the following kinds of property dispositions. Printable tax form 1040x Dispositions due to the death of either related person, Involuntary conversions, and Dispositions in which neither the original exchange nor the subsequent disposition had as a main purpose the avoidance of federal income tax. Printable tax form 1040x Related persons. Printable tax form 1040x   Generally, related persons are ancestors, lineal descendants, brothers and sisters (whole or half), and a spouse. Printable tax form 1040x   For other related persons (for example, two corporations, an individual and a corporation, a grantor and fiduciary, etc. Printable tax form 1040x ), see Nondeductible Loss in chapter 2 of Publication 544. Printable tax form 1040x Exchange of business property. Printable tax form 1040x   Exchanging the assets of one business for the assets of another business is a multiple property exchange. Printable tax form 1040x For information on figuring basis, see Multiple Property Exchanges in chapter 1 of Publication 544. Printable tax form 1040x Partially Nontaxable Exchange A partially nontaxable exchange is an exchange in which you receive unlike property or money in addition to like property. Printable tax form 1040x The basis of the property you receive is the same as the basis of the property you gave up, with the following adjustments. Printable tax form 1040x Decrease the basis by the following amounts. Printable tax form 1040x Any money you receive, and Any loss you recognize on the exchange. Printable tax form 1040x Increase the basis by the following amounts. Printable tax form 1040x Any additional costs you incur, and Any gain you recognize on the exchange. Printable tax form 1040x If the other party to the exchange assumes your liabilities, treat the debt assumption as money you received in the exchange. Printable tax form 1040x Example. Printable tax form 1040x You traded a truck (adjusted basis $6,000) for a new truck (FMV $5,200) and $1,000 cash. Printable tax form 1040x You realized a gain of $200 ($6,200 − $6,000). Printable tax form 1040x This is the FMV of the truck received plus the cash minus the adjusted basis of the truck you traded ($5,200 + $1,000 – $6,000). Printable tax form 1040x You include all the gain in income (recognized gain) because the gain is less than the cash received. Printable tax form 1040x Your basis in the new truck is: Adjusted basis of old truck $6,000 Minus: Cash received (adjustment 1(a)) 1,000   $5,000 Plus: Gain recognized (adjustment 2(b)) 200 Basis of new truck $5,200 Allocation of basis. Printable tax form 1040x   Allocate the basis first to the unlike property, other than money, up to its FMV on the date of the exchange. Printable tax form 1040x The rest is the basis of the like property. Printable tax form 1040x Example. Printable tax form 1040x You had an adjusted basis of $15,000 in real estate you held for investment. Printable tax form 1040x You exchanged it for other real estate to be held for investment with an FMV of $12,500, a truck with an FMV of $3,000, and $1,000 cash. Printable tax form 1040x The truck is unlike property. Printable tax form 1040x You realized a gain of $1,500 ($16,500 − $15,000). Printable tax form 1040x This is the FMV of the real estate received plus the FMV of the truck received plus the cash minus the adjusted basis of the real estate you traded ($12,500 + $3,000 + $1,000 – $15,000). Printable tax form 1040x You include in income (recognize) all $1,500 of the gain because it is less than the FMV of the unlike property plus the cash received. Printable tax form 1040x Your basis in the properties you received is figured as follows. Printable tax form 1040x Adjusted basis of real estate transferred $15,000 Minus: Cash received (adjustment 1(a)) 1,000   $14,000 Plus: Gain recognized (adjustment 2(b)) 1,500 Total basis of properties received $15,500 Allocate the total basis of $15,500 first to the unlike property — the truck ($3,000). Printable tax form 1040x This is the truck's FMV. Printable tax form 1040x The rest ($12,500) is the basis of the real estate. Printable tax form 1040x Sale and Purchase If you sell property and buy similar property in two mutually dependent transactions, you may have to treat the sale and purchase as a single nontaxable exchange. Printable tax form 1040x Example. Printable tax form 1040x You are a salesperson and you use one of your cars 100% for business. Printable tax form 1040x You have used this car in your sales activities for 2 years and have depreciated it. Printable tax form 1040x Your adjusted basis in the car is $22,600 and its FMV is $23,100. Printable tax form 1040x You are interested in a new car, which sells for $28,000. Printable tax form 1040x If you trade your old car and pay $4,900 for the new one, your basis for depreciation for the new car would be $27,500 ($4,900 plus the $22,600 basis of your old car). Printable tax form 1040x However, you want a higher basis for depreciating the new car, so you agree to pay the dealer $28,000 for the new car if he will pay you $23,100 for your old car. Printable tax form 1040x Because the two transactions are dependent on each other, you are treated as having exchanged your old car for the new one and paid $4,900 ($28,000 − $23,100). Printable tax form 1040x Your basis for depreciating the new car is $27,500, the same as if you traded the old car. Printable tax form 1040x Partial Business Use of Property If you have property used partly for business and partly for personal use, and you exchange it in a nontaxable exchange for property to be used wholly or partly in your business, the basis of the property you receive is figured as if you had exchanged two properties. Printable tax form 1040x The first is an exchange of like-kind property. Printable tax form 1040x The second is personal-use property on which gain is recognized and loss is not recognized. Printable tax form 1040x First, figure your adjusted basis in the property as if you transferred two separate properties. Printable tax form 1040x Figure the adjusted basis of each part of the property by taking into account any adjustments to basis. Printable tax form 1040x Deduct the depreciation you took or could have taken from the adjusted basis of the business part. Printable tax form 1040x Then figure the amount realized for your property and allocate it to the business and nonbusiness parts of the property. Printable tax form 1040x The business part of the property is permitted to be exchanged tax free. Printable tax form 1040x However, you must recognize any gain from the exchange of the nonbusiness part. Printable tax form 1040x You are deemed to have received, in exchange for the nonbusiness part, an amount equal to its FMV on the date of the exchange. Printable tax form 1040x The basis of the property you acquired is the total basis of the property transferred (adjusted to the date of the exchange), increased by any gain recognized on the nonbusiness part. Printable tax form 1040x If the nonbusiness part of the property transferred is your main home, you may qualify to exclude from income all or part of the gain on that part. Printable tax form 1040x For more information, see Publication 523. Printable tax form 1040x Trade of car used partly in business. Printable tax form 1040x   If you trade in a car you used partly in your business for another car you will use in your business, your basis for depreciation of the new car is not the same as your basis for figuring a gain or loss on its sale. Printable tax form 1040x   For information on figuring your basis for depreciation, see Publication 463. Printable tax form 1040x Property Transferred From a Spouse The basis of property transferred to you or transferred in trust for your benefit by your spouse (or former spouse if the transfer is incident to divorce), is the same as your spouse's adjusted basis. Printable tax form 1040x However, adjust your basis for any gain recognized by your spouse or former spouse on property transferred in trust. Printable tax form 1040x This rule applies only to a transfer of property in trust in which the liabilities assumed, plus the liabilities to which the property is subject, are more than the adjusted basis of the property transferred. Printable tax form 1040x If the property transferred to you is a series E, series EE, or series I United States savings bond, the transferor must include in income the interest accrued to the date of transfer. Printable tax form 1040x 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. Printable tax form 1040x For more information on these bonds, see Publication 550. Printable tax form 1040x At the time of the transfer, the transferor must give you the records necessary to determine the adjusted basis and holding period of the property as of the date of transfer. Printable tax form 1040x For more information, see Publication 504, Divorced or Separated Individuals. Printable tax form 1040x Property Received as a Gift To figure the basis of property you receive as a gift, you must know its adjusted basis (defined earlier) 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. Printable tax form 1040x FMV Less Than Donor's Adjusted Basis 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. Printable tax form 1040x Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustment to basis while you held the property. Printable tax form 1040x Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustment to basis while you held the property (see Adjusted Basis earlier). Printable tax form 1040x If you use the donor's adjusted basis for figuring a gain and get a loss, and then use the FMV for figuring a loss and have a gain, you have neither gain nor loss on the sale or disposition of the property. Printable tax form 1040x Example. Printable tax form 1040x You received an acre of land as a gift. Printable tax form 1040x At the time of the gift, the land had an FMV of $8,000. Printable tax form 1040x The donor's adjusted basis was $10,000. Printable tax form 1040x After you received the land, no events occurred to increase or decrease your basis. Printable tax form 1040x If you sell the land for $12,000, you will have a $2,000 gain because you must use the donor's adjusted basis ($10,000) at the time of the gift as your basis to figure gain. Printable tax form 1040x If you sell the land for $7,000, you will have a $1,000 loss because you must use the FMV ($8,000) at the time of the gift as your basis to figure a loss. Printable tax form 1040x If the sales price is between $8,000 and $10,000, you have neither gain nor loss. Printable tax form 1040x For instance, if the sales price was $9,000 and you tried to figure a gain using the donor's adjusted basis ($10,000), you would get a $1,000 loss. Printable tax form 1040x If you then tried to figure a loss using the FMV ($8,000), you would get a $1,000 gain. Printable tax form 1040x Business property. Printable tax form 1040x   If you hold the gift as business property, your basis for figuring any depreciation, depletion, or amortization deduction is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you hold the property. Printable tax form 1040x FMV Equal to or More Than Donor's Adjusted Basis 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. Printable tax form 1040x Increase your basis by all or part of any gift tax paid, depending on the date of the gift. Printable tax form 1040x Also, for figuring gain or loss from a sale or other disposition of the property, or for figuring depreciation, depletion, or amortization deductions on business property, you must increase or decrease your basis by any required adjustments to basis while you held the property. Printable tax form 1040x See Adjusted Basis earlier. Printable tax form 1040x Gift received before 1977. Printable tax form 1040x   If you received a gift before 1977, increase your basis in the gift (the donor's adjusted basis) by any gift tax paid on it. Printable tax form 1040x However, do not increase your basis above the FMV of the gift at the time it was given to you. Printable tax form 1040x Example 1. Printable tax form 1040x You were given a house in 1976 with an FMV of $21,000. Printable tax form 1040x The donor's adjusted basis was $20,000. Printable tax form 1040x The donor paid a gift tax of $500. Printable tax form 1040x Your basis is $20,500, the donor's adjusted basis plus the gift tax paid. Printable tax form 1040x Example 2. Printable tax form 1040x If, in Example 1, the gift tax paid had been $1,500, your basis would be $21,000. Printable tax form 1040x This is the donor's adjusted basis plus the gift tax paid, limited to the FMV of the house at the time you received the gift. Printable tax form 1040x Gift received after 1976. Printable tax form 1040x   If you received a gift after 1976, increase your basis in the gift (the donor's adjusted basis) by the part of the gift tax paid on it that is due to the net increase in value of the gift. Printable tax form 1040x Figure the increase by multiplying the gift tax paid by a fraction. Printable tax form 1040x The numerator of the fraction is the net increase in value of the gift and the denominator is the amount of the gift. Printable tax form 1040x   The net increase in value of the gift is the FMV of the gift less the donor's adjusted basis. Printable tax form 1040x 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. Printable tax form 1040x For information on the gift tax, see Publication 950, Introduction to Estate and Gift Taxes. Printable tax form 1040x Example. Printable tax form 1040x In 2010, you received a gift of property from your mother that had an FMV of $50,000. Printable tax form 1040x Her adjusted basis was $20,000. Printable tax form 1040x The amount of the gift for gift tax purposes was $37,000 ($50,000 minus the $13,000 annual exclusion). Printable tax form 1040x She paid a gift tax of $9,000. Printable tax form 1040x Your basis, $27,290, is figured as follows: Fair market value $50,000 Minus: Adjusted basis 20,000 Net increase in value $30,000 Gift tax paid $9,000 Multiplied by ($30,000 ÷ $37,000) . Printable tax form 1040x 81 Gift tax due to net increase in value $7,290 Adjusted basis of property to your mother 20,000 Your basis in the property $27,290 Inherited Property Special rules apply to property acquired from a decedent who died in 2010. Printable tax form 1040x See Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, for details. Printable tax form 1040x If you inherited property from a decedent who died before 2010, your basis in property you inherit from a decedent is generally one of the following. Printable tax form 1040x The FMV of the property at the date of the individual's death. Printable tax form 1040x The FMV on the alternate valuation date if the personal representative for the estate chooses to use alternate valuation. Printable tax form 1040x For information on the alternate valuation date, see the Instructions for Form 706. Printable tax form 1040x The value under the special-use valuation method for real property used in farming or a closely held business if chosen for estate tax purposes. Printable tax form 1040x This method is discussed later. Printable tax form 1040x 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. Printable tax form 1040x For information on a qualified conservation easement, see the Instructions for Form 706. Printable tax form 1040x 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. Printable tax form 1040x For more information, see the Instructions for Form 706. Printable tax form 1040x Appreciated property. Printable tax form 1040x   The above rule does not apply to appreciated property you receive from a decedent if you or your spouse originally gave the property to the decedent within 1 year before the decedent's death. Printable tax form 1040x Your basis in this property is the same as the decedent's adjusted basis in the property immediately before his or her death, rather than its FMV. Printable tax form 1040x Appreciated property is any property whose FMV on the day it was given to the decedent is more than its adjusted basis. Printable tax form 1040x Community Property 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. Printable tax form 1040x 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. Printable tax form 1040x For this rule to apply, at least half the value of the community property interest must be includable in the decedent's gross estate, whether or not the estate must file a return. Printable tax form 1040x For example, you and your spouse owned community property that had a basis of $80,000. Printable tax form 1040x When your spouse died, half the FMV of the community interest was includible in your spouse's estate. Printable tax form 1040x The FMV of the community interest was $100,000. Printable tax form 1040x The basis of your half of the property after the death of your spouse is $50,000 (half of the $100,000 FMV). Printable tax form 1040x The basis of the other half to your spouse's heirs is also $50,000. Printable tax form 1040x For more information on community property, see Publication 555, Community Property. Printable tax form 1040x Property Held by Surviving Tenant The following example explains the rule for the basis of property held by a surviving tenant in joint tenancy or tenancy by the entirety. Printable tax form 1040x Example. Printable tax form 1040x John and Jim owned, as joint tenants with right of survivorship, business property they purchased for $30,000. Printable tax form 1040x John furnished two-thirds of the purchase price and Jim furnished one-third. Printable tax form 1040x Depreciation deductions allowed before John's death were $12,000. Printable tax form 1040x Under local law, each had a half interest in the income from the property. Printable tax form 1040x At the date of John's death, the property had an FMV of $60,000, two-thirds of which is includable in John's estate. Printable tax form 1040x Jim figures his basis in the property at the date of John's death as follows: Interest Jim bought with his own funds—1/3 of $30,000 cost $10,000   Interest Jim received on John's death—2/3 of $60,000 FMV 40,000 $50,000 Minus: ½ of $12,000 depreciation before John's death 6,000 Jim's basis at the date of John's death $44,000 If Jim had not contributed any part of the purchase price, his basis at the date of John's death would be $54,000. Printable tax form 1040x This is figured by subtracting from the $60,000 FMV, the $6,000 depreciation allocated to Jim's half interest before the date of death. Printable tax form 1040x If under local law Jim had no interest in the income from the property and he contributed no part of the purchase price, his basis at John's death would be $60,000, the FMV of the property. Printable tax form 1040x Qualified Joint Interest Include one-half of the value of a qualified joint interest in the decedent's gross estate. Printable tax form 1040x It does not matter how much each spouse contributed to the purchase price. Printable tax form 1040x Also, it does not matter which spouse dies first. Printable tax form 1040x A qualified joint interest is any interest in property held by husband and wife as either of the following. Printable tax form 1040x Tenants by the entirety, or Joint tenants with right of survivorship if husband and wife are the only joint tenants. Printable tax form 1040x Basis. Printable tax form 1040x   As the surviving spouse, your basis in property you owned with your spouse as a qualified joint interest is the cost of your half of the property with certain adjustments. Printable tax form 1040x Decrease the cost by any deductions allowed to you for depreciation and depletion. Printable tax form 1040x Increase the reduced cost by your basis in the half you inherited. Printable tax form 1040x Farm or Closely Held Business Under certain conditions, when a person dies the executor or personal representative of that person's estate can choose to value the qualified real property on other than its FMV. Printable tax form 1040x If so, the executor or personal representative values the qualified real property based on its use as a farm or its use in a closely held business. Printable tax form 1040x If the executor or personal representative chooses this method of valuation for estate tax purposes, that value is the basis of the property for the heirs. Printable tax form 1040x Qualified heirs should be able to get the necessary value from the executor or personal representative of the estate. Printable tax form 1040x Special-use valuation. Printable tax form 1040x   If you are a qualified heir who received special-use valuation property, your basis in the property is the estate's or trust's basis in that property immediately before the distribution. Printable tax form 1040x Increase your basis by any gain recognized by the estate or trust because of post-death appreciation. Printable tax form 1040x Post-death appreciation is the property's FMV on the date of distribution minus the property's FMV either on the date of the individual's death or the alternate valuation date. Printable tax form 1040x Figure all FMVs without regard to the special-use valuation. Printable tax form 1040x   You can elect to increase your basis in special-use valuation property if it becomes subject to the additional estate tax. Printable tax form 1040x This tax is assessed if, within 10 years after the death of the decedent, you transfer the property to a person who is not a member of your family or the property stops being used as a farm or in a closely held business. Printable tax form 1040x   To increase your basis in the property, you must make an irrevocable election and pay interest on the additional estate tax figured from the date 9 months after the decedent's death until the date of the payment of the additional estate tax. Printable tax form 1040x If you meet these requirements, increase your basis in the property to its FMV on the date of the decedent's death or the alternate valuation date. Printable tax form 1040x The increase in your basis is considered to have occurred immediately before the event that results in the additional estate tax. Printable tax form 1040x   You make the election by filing with Form 706-A a statement that does all of the following. Printable tax form 1040x Contains your name, address, and taxpayer identification number and those of the estate; Identifies the election as an election under section 1016(c) of the Internal Revenue Code; Specifies the property for which the election is made; and Provides any additional information required by the Instructions for Form 706-A. Printable tax form 1040x   For more information, see the Instructions for Form 706 and the Instructions for Form 706-A. Printable tax form 1040x Property Changed 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 must figure its basis for depreciation. Printable tax form 1040x An example of changing property held for personal use to business use would be renting out your former main home. Printable tax form 1040x Basis for depreciation. Printable tax form 1040x   The basis for depreciation is the lesser of the following amounts. Printable tax form 1040x The FMV of the property on the date of the change, or Your adjusted basis on the date of the change. Printable tax form 1040x Example. Printable tax form 1040x Several years ago you paid $160,000 to have your home built on a lot that cost $25,000. Printable tax form 1040x 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. Printable tax form 1040x Because land is not depreciable, you include only the cost of the house when figuring the basis for depreciation. Printable tax form 1040x Your adjusted basis in the house when you changed its use was $178,000 ($160,000 + $20,000 − $2,000). Printable tax form 1040x 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. Printable tax form 1040x The basis for figuring depreciation on the house is its FMV on the date of change ($165,000) because it is less than your adjusted basis ($178,000). Printable tax form 1040x Sale of property. Printable tax form 1040x   If you later sell or dispose of property changed to business or rental use, the basis of the property you use will depend on whether you are figuring gain or loss. Printable tax form 1040x Gain. Printable tax form 1040x   The basis for figuring a gain is your adjusted basis when you sell the property. Printable tax form 1040x Example. Printable tax form 1040x 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. Printable tax form 1040x Your adjusted basis for figuring gain is $165,500 ($178,000 + $25,000 (land) − $37,500). Printable tax form 1040x Loss. Printable tax form 1040x   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. Printable tax form 1040x Then adjust this amount for the period after the change in the property's use, as discussed earlier under Adjusted Basis, to arrive at a basis for loss. Printable tax form 1040x Example. Printable tax form 1040x 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. Printable tax form 1040x 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) on that date. Printable tax form 1040x Reduce that amount ($180,000) by the depreciation deductions to arrive at a basis for loss of $142,500 ($180,000 − $37,500). Printable tax form 1040x How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. Printable tax form 1040x By selecting the method that is best for you, you will have quick and easy access to tax help. Printable tax form 1040x Contacting your Taxpayer Advocate. Printable tax form 1040x   The Taxpayer Advocate Service (TAS) is an independent organization within the IRS. Printable tax form 1040x We help taxpayers who are experiencing economic harm, such as not being able to provide necessities like housing, transportation, or food; taxpayers who are seeking help in resolving tax problems with the IRS; and those who believe that an IRS system or procedure is not working as it should. Printable tax form 1040x Here are seven things every taxpayer should know about TAS. Printable tax form 1040x TAS is your voice at the IRS. Printable tax form 1040x Our service is free, confidential, and tailored to meet your needs. Printable tax form 1040x You may be eligible for our help if you have tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn't working as it should. Printable tax form 1040x We help taxpayers whose problems are causing financial difficulty or significant cost, including the cost of professional representation. Printable tax form 1040x This includes businesses as well as individuals. Printable tax form 1040x Our employees know the IRS and how to navigate it. Printable tax form 1040x If you qualify for our help, we'll assign your case to an advocate who will listen to your problem, help you understand what needs to be done to resolve it, and stay with you every step of the way until your problem is resolved. Printable tax form 1040x We have at least one local taxpayer advocate in every state, the District of Columbia, and Puerto Rico. Printable tax form 1040x You can call your local advocate, whose number is in your phone book, in Publication 1546, Taxpayer Advocate Service—Your Voice at the IRS, and on our website at www. Printable tax form 1040x irs. Printable tax form 1040x gov/advocate. Printable tax form 1040x You can also call our toll-free line at 1-877-777-4778 or TTY/TDD 1-800-829-4059. Printable tax form 1040x You can learn about your rights and responsibilities as a taxpayer by visiting our online tax toolkit at www. Printable tax form 1040x taxtoolkit. Printable tax form 1040x irs. Printable tax form 1040x gov. Printable tax form 1040x You can get updates on hot tax topics by visiting our YouTube channel at www. Printable tax form 1040x youtube. Printable tax form 1040x com/tasnta and our Facebook page at www. Printable tax form 1040x facebook. Printable tax form 1040x com/YourVoiceAtIRS, or by following our tweets at www. Printable tax form 1040x twitter. Printable tax form 1040x com/YourVoiceAtIRS. Printable tax form 1040x Low Income Taxpayer Clinics (LITCs). Printable tax form 1040x   The Low Income Taxpayer Clinic program serves individuals who have a problem with the IRS and whose income is below a certain level. Printable tax form 1040x LITCs are independent from the IRS. Printable tax form 1040x Most LITCs can provide representation before the IRS or in court on audits, tax collection disputes, and other issues for free or a small fee. Printable tax form 1040x If an individual's native language is not English, some clinics can provide multilingual information about taxpayer rights and responsibilities. Printable tax form 1040x For more information, see Publication 4134, Low Income Taxpayer Clinic List. Printable tax form 1040x This publication is available at IRS. Printable tax form 1040x gov, by calling 1-800-TAX-FORM (1-800-829-3676), or at your local IRS office. Printable tax form 1040x Free tax services. Printable tax form 1040x   Publication 910, IRS Guide to Free Tax Services, is your guide to IRS services and resources. Printable tax form 1040x Learn about free tax information from the IRS, including publications, services, and education and assistance programs. Printable tax form 1040x The publication also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on the telephone. Printable tax form 1040x The majority of the information and services listed in this publication are available to you free of charge. Printable tax form 1040x If there is a fee associated with a resource or service, it is listed in the publication. Printable tax form 1040x   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with d
Español

Medicaid and CHIP Payment and Access Commission

The Medicaid and CHIP Payment and Access Commission reviews federal and state medicaid and CHIP policies and makes recommendations to Congress, the department of health and human services, and the states.

Contact the Agency or Department

Website: Medicaid and CHIP Payment and Access Commission

Address: 1800 M Street, NW
Suite 350N

Washington, DC 20036

Phone Number: (202) 273-2460

The Printable Tax Form 1040x

Printable tax form 1040x Publication 721 - Main Content Table of Contents Part I General InformationRefund of Contributions Tax Withholding and Estimated Tax Filing Requirements Part II Rules for RetireesAnnuity starting date. Printable tax form 1040x Gross monthly rate. Printable tax form 1040x Your cost. Printable tax form 1040x Choosing a survivor annuity after retirement. Printable tax form 1040x Canceling a survivor annuity after retirement. Printable tax form 1040x Annuity starting date after 1986. Printable tax form 1040x Annuity starting date before 1987. Printable tax form 1040x Simplified Method General Rule Three-Year Rule Alternative Annuity Option Federal Gift Tax Retirement During the Past Year Reemployment After Retirement Nonresident Aliens Thrift Savings Plan Rollover Rules Distributions Used To Pay Insurance Premiums for Public Safety Officers How To Report Benefits Part III Rules for Disability Retirement and Credit for the Elderly or the DisabledDisability Annuity Other Benefits Credit for the Elderly or the Disabled Part IV Rules for Survivors of Federal EmployeesFERS Death Benefit CSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Thrift Savings Plan Federal Estate Tax Part V Rules for Survivors of Federal RetireesCSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Voluntary Contributions Thrift Savings Plan Federal Estate Tax Income Tax Deduction for Estate Tax Paid How To Get Tax HelpLow Income Taxpayer Clinics Part I General Information This part of the publication contains information that can apply to most recipients of civil service retirement benefits. Printable tax form 1040x Refund of Contributions If you leave federal government service or transfer to a job not under the CSRS or FERS and you are not eligible for an immediate annuity, you can choose to receive a refund of the money in your CSRS or FERS retirement account. Printable tax form 1040x The refund will include both regular and voluntary contributions you made to the fund, plus any interest payable. Printable tax form 1040x If the refund includes only your contributions, none of the refund is taxable. Printable tax form 1040x If it includes any interest, the interest is taxable unless you roll it over directly into another qualified plan or a traditional individual retirement arrangement (IRA). Printable tax form 1040x If you do not have the Office of Personnel Management (OPM) transfer the interest to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. Printable tax form 1040x See Rollover Rules in Part II for information on how to make a rollover. Printable tax form 1040x Interest is not paid on contributions to the CSRS for service after 1956 unless your service was for more than 1 year but not more than 5 years. Printable tax form 1040x Therefore, many employees who withdraw their contributions under the CSRS do not get interest and do not owe any tax on their refund. Printable tax form 1040x If you do not roll over interest included in your refund, it may qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. Printable tax form 1040x If you separate from service before the calendar year in which you reach age 55, it may be subject to an additional 10% tax on early distributions. Printable tax form 1040x For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. Printable tax form 1040x A lump-sum distribution is eligible for capital gain treatment or the 10-year tax option only if the plan participant was born before January 2, 1936. Printable tax form 1040x Tax Withholding and Estimated Tax The CSRS or FERS annuity you receive is subject to federal income tax withholding, unless you choose not to have tax withheld. Printable tax form 1040x OPM will tell you how to make the choice. Printable tax form 1040x The choice for no withholding remains in effect until you change it. Printable tax form 1040x These withholding rules also apply to a disability annuity, whether received before or after minimum retirement age. Printable tax form 1040x If you choose not to have tax withheld, or if you do not have enough tax withheld, you may have to make estimated tax payments. Printable tax form 1040x You may owe a penalty if the total of your withheld tax and estimated tax does not cover most of the tax shown on your return. Printable tax form 1040x Generally, you will owe the penalty for 2014 if the additional tax you must pay with your return is $1,000 or more and more than 10% of the tax to be shown on your 2014 return. Printable tax form 1040x For more information, including exceptions to the penalty, see chapter 4 of Publication 505, Tax Withholding and Estimated Tax. Printable tax form 1040x Form CSA 1099R. Printable tax form 1040x   Form CSA 1099R is mailed to you by OPM each year. Printable tax form 1040x It will show any tax you had withheld. Printable tax form 1040x File a copy of Form CSA 1099R with your tax return if any federal income tax was withheld. Printable tax form 1040x    You also can view and download your Form CSA 1099R by visiting the OPM website at  www. Printable tax form 1040x servicesonline. Printable tax form 1040x opm. Printable tax form 1040x gov. Printable tax form 1040x To log in, you will need your retirement CSA claim number and your personal identification number. Printable tax form 1040x Choosing no withholding on payments outside the United States. Printable tax form 1040x   The choice for no withholding generally cannot be made for annuity payments to be delivered outside the United States and its possessions. Printable tax form 1040x   To choose no withholding if you are a U. Printable tax form 1040x S. Printable tax form 1040x citizen or resident alien, you must provide OPM with your home address in the United States or its possessions. Printable tax form 1040x Otherwise, OPM has to withhold tax. Printable tax form 1040x For example, OPM must withhold if you provide a U. Printable tax form 1040x S. Printable tax form 1040x address for a nominee, trustee, or agent (such as a bank) to whom the benefits are to be delivered, but you do not provide your own U. Printable tax form 1040x S. Printable tax form 1040x home address. Printable tax form 1040x   If you do not provide a home address in the United States or its possessions, you can choose not to have tax withheld only if you certify to OPM that you are not a U. Printable tax form 1040x S. Printable tax form 1040x citizen, a U. Printable tax form 1040x S. Printable tax form 1040x resident alien, or someone who left the United States to avoid tax. Printable tax form 1040x But if you so certify, you may be subject to the 30% flat rate withholding that applies to nonresident aliens. Printable tax form 1040x For details, see Publication 519, U. Printable tax form 1040x S. Printable tax form 1040x Tax Guide for Aliens. Printable tax form 1040x Withholding certificate. Printable tax form 1040x   If you give OPM a Form W-4P-A, Election of Federal Income Tax Withholding, you can choose not to have tax withheld or you can choose to have tax withheld. Printable tax form 1040x The amount of tax withheld depends on your marital status, the number of withholding allowances, and any additional amount you designate to be withheld. Printable tax form 1040x If you do not make either of these choices, OPM must withhold as if you were married with three withholding allowances. Printable tax form 1040x To change the amount of tax withholding or to stop withholding, call OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. Printable tax form 1040x C. Printable tax form 1040x calling area must call 202-606-0500). Printable tax form 1040x No special form is needed. Printable tax form 1040x You will need your retirement CSA or CSF claim number, your social security number, and your personal identification number (PIN) when you call. Printable tax form 1040x If you have TTY/TDD equipment, call 1-855–887–4957. Printable tax form 1040x If you need a PIN, call OPM's Retirement Information Office. Printable tax form 1040x You also can change the amount of withholding or stop withholding online by visiting the OPM website at www. Printable tax form 1040x servicesonline. Printable tax form 1040x opm. Printable tax form 1040x gov. Printable tax form 1040x You will need your retirement CSA or CSF claim number and your PIN. Printable tax form 1040x Withholding from certain lump-sum payments. Printable tax form 1040x   If you leave the federal government before becoming eligible to retire and you apply for a refund of your CSRS or FERS contributions, or you die without leaving a survivor eligible for an annuity, you or your beneficiary will receive a distribution of your contributions to the retirement plan plus any interest payable. Printable tax form 1040x Tax will be withheld at a 20% rate on the interest distributed. Printable tax form 1040x However, tax will not be withheld if you have OPM transfer (roll over) the interest directly to your traditional IRA or other qualified plan. Printable tax form 1040x If you have OPM transfer (roll over) the interest directly to a Roth IRA, the entire amount will be taxed in the current year. Printable tax form 1040x Because no income tax will be withheld at the time of the transfer, you may want to increase your withholding or pay estimated taxes. Printable tax form 1040x See Rollover Rules in Part II. Printable tax form 1040x If you receive only your contributions, no tax will be withheld. Printable tax form 1040x Withholding from Thrift Savings Plan payments. Printable tax form 1040x   Generally, a distribution that you receive from the TSP is subject to federal income tax withholding. Printable tax form 1040x The amount withheld is: 20% if the distribution is an eligible rollover distribution, 10% if it is a nonperiodic distribution other than an eligible rollover distribution, or An amount determined as if you were married with three withholding allowances, unless you submit a withholding certificate (Form W-4P), if it is a periodic distribution. Printable tax form 1040x  However, you usually can choose not to have tax withheld from TSP payments other than eligible rollover distributions. Printable tax form 1040x By January 31 after the end of the year in which you receive a distribution, the TSP will issue Form 1099-R showing the total distributions you received in the prior year and the amount of tax withheld. Printable tax form 1040x   For a detailed discussion of withholding on distributions from the TSP, see Important Tax Information About Payments From Your TSP Account, available from your agency personnel office or from the TSP. Printable tax form 1040x The above document is also available in the “Forms & Publications” section of the TSP website at www. Printable tax form 1040x tsp. Printable tax form 1040x gov. Printable tax form 1040x Estimated tax. Printable tax form 1040x   Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax for 2014 (after subtracting your withholding and credits) and you expect your withholding and your credits to be less than the smaller of: 90% of the tax to be shown on your income tax return for 2014, or 100% of the tax shown on your 2013 income tax return (110% of that amount if the adjusted gross income shown on the return was more than $150,000 ($75,000 if your filing status for 2014 will be married filing separately)). Printable tax form 1040x The return must cover all 12 months. Printable tax form 1040x   You do not have to pay estimated tax for 2014 if you were a U. Printable tax form 1040x S. Printable tax form 1040x citizen or resident alien for all of 2013 and you had no tax liability for the full 12-month 2013 tax year. Printable tax form 1040x   Publication 505 contains information that you can use to help you figure your estimated tax payments. Printable tax form 1040x Filing Requirements If your gross income, including the taxable part of your annuity, is less than a certain amount, you generally do not have to file a federal income tax return for that year. Printable tax form 1040x The gross income filing requirements for the tax year are in the instructions to Form 1040, 1040A, or 1040EZ. Printable tax form 1040x Children. Printable tax form 1040x   If you are the surviving spouse of a federal employee or retiree and your monthly annuity check includes a survivor annuity for one or more children, each child's annuity counts as his or her own income (not yours) for federal income tax purposes. Printable tax form 1040x   If your child can be claimed as a dependent, treat the taxable part of his or her annuity as unearned income when applying the filing requirements for dependents. Printable tax form 1040x Form CSF 1099R. Printable tax form 1040x   Form CSF 1099R will be mailed to you by January 31 after the end of each tax year. Printable tax form 1040x It will show the total amount of the annuity you received in the past year. Printable tax form 1040x It also should show, separately, the survivor annuity for a child or children. Printable tax form 1040x Only the part that is each individual's survivor annuity should be shown on that individual's Form 1040 or 1040A. Printable tax form 1040x   If your Form CSF 1099R does not show separately the amount paid to you for a child or children, attach a statement to your return, along with a copy of Form CSF 1099R, explaining why the amount shown on the tax return differs from the amount shown on Form CSF 1099R. Printable tax form 1040x    You also can view and download your Form CSF 1099R by visiting the OPM website at  www. Printable tax form 1040x servicesonline. Printable tax form 1040x opm. Printable tax form 1040x gov. Printable tax form 1040x To log in you will need your retirement CSF claim number and personal identification number. Printable tax form 1040x    You may request a Summary of Payments, showing the amounts paid to you for your child(ren), from OPM by calling OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. Printable tax form 1040x C. Printable tax form 1040x calling area must call 202-606-0500). Printable tax form 1040x You will need your CSF claim number and your social security number when you call. Printable tax form 1040x Taxable part of annuity. Printable tax form 1040x   To find the taxable part of a retiree's annuity when applying the filing requirements, see the discussion in Part II, Rules for Retirees , or Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled , whichever applies. Printable tax form 1040x To find the taxable part of each survivor annuity when applying the filing requirements, see the discussion in Part IV, Rules for Survivors of Federal Employees , or Part V, Rules for Survivors of Federal Retirees , whichever applies. Printable tax form 1040x Part II Rules for Retirees This part of the publication is for retirees who retired on nondisability retirement. Printable tax form 1040x If you retired on disability before you reached your minimum retirement age, see Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled. Printable tax form 1040x However, on the day after you reach your minimum retirement age, use the rules in this section to report your disability retirement and begin recovering your cost. Printable tax form 1040x Annuity statement. Printable tax form 1040x   The statement you received from OPM when your CSRS or FERS annuity was approved shows the commencing date (the annuity starting date), the gross monthly rate of your annuity benefit, and your total contributions to the retirement plan (your cost). Printable tax form 1040x You will use this information to figure the tax-free recovery of your cost. Printable tax form 1040x Annuity starting date. Printable tax form 1040x   If you retire from federal government service on a regular annuity, your annuity starting date is the commencing date on your annuity statement from OPM. Printable tax form 1040x If something delays payment of your annuity, such as a late application for retirement, it does not affect the date your annuity begins to accrue or your annuity starting date. Printable tax form 1040x Gross monthly rate. Printable tax form 1040x   This is the amount you were to get after any adjustment for electing a survivor's annuity or for electing the lump-sum payment under the alternative annuity option (if either applied) but before any deduction for income tax withholding, insurance premiums, etc. Printable tax form 1040x Your cost. Printable tax form 1040x   Your monthly annuity payment contains an amount on which you have previously paid income tax. Printable tax form 1040x This amount represents part of your contributions to the retirement plan. Printable tax form 1040x Even though you did not receive the money that was contributed to the plan, it was included in your gross income for federal income tax purposes in the years it was taken out of your pay. Printable tax form 1040x   The cost of your annuity is the total of your contributions to the retirement plan, as shown on your annuity statement from OPM. Printable tax form 1040x If you elected the alternative annuity option, it includes any deemed deposits and any deemed redeposits that were added to your lump-sum credit. Printable tax form 1040x (See Lump-sum credit under Alternative Annuity Option, later. Printable tax form 1040x )   If you repaid contributions that you had withdrawn from the retirement plan earlier, or if you paid into the plan to receive full credit for service not subject to retirement deductions, the entire repayment, including any interest, is a part of your cost. Printable tax form 1040x You cannot claim an interest deduction for any interest payments. Printable tax form 1040x You cannot treat these payments as voluntary contributions; they are considered regular employee contributions. Printable tax form 1040x Recovering your cost tax free. Printable tax form 1040x   How you figure the tax-free recovery of the cost of your CSRS or FERS annuity depends on your annuity starting date. Printable tax form 1040x If your annuity starting date is before July 2, 1986, either the Three-Year Rule or the General Rule (both discussed later) applies to your annuity. Printable tax form 1040x If your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method (discussed later). Printable tax form 1040x If your annuity starting date is after November 18, 1996, you must use the Simplified Method. Printable tax form 1040x   Under both the General Rule and the Simplified Method, each of your monthly annuity payments is made up of two parts: the tax-free part that is a return of your cost, and the taxable part that is the amount of each payment that is more than the part that represents your cost (unless such payment is used for purposes discussed under Distributions Used To Pay Insurance Premiums for Public Safety Officers , later). Printable tax form 1040x The tax-free part is a fixed dollar amount. Printable tax form 1040x It remains the same, even if your annuity is increased. Printable tax form 1040x Generally, this rule applies as long as you receive your annuity. Printable tax form 1040x However, see Exclusion limit , later. Printable tax form 1040x Choosing a survivor annuity after retirement. Printable tax form 1040x    If you retired without a survivor annuity and report your annuity under the Simplified Method, do not change your tax-free monthly amount even if you later choose a survivor annuity. Printable tax form 1040x   If you retired without a survivor annuity and report your annuity under the General Rule, you must figure the tax-free part of your annuity using a new exclusion percentage if you later choose a survivor annuity and take reduced annuity payments. Printable tax form 1040x To figure the new exclusion percentage, reduce your cost by the amount you previously recovered tax free. Printable tax form 1040x Figure the expected return as of the date the reduced annuity begins. Printable tax form 1040x For details on the General Rule, see Publication 939. Printable tax form 1040x Canceling a survivor annuity after retirement. Printable tax form 1040x   If you retired with a survivor annuity payable to your spouse upon your death and you notify OPM that your marriage has ended, your annuity might be increased to remove the reduction for a survivor benefit. Printable tax form 1040x The increased annuity does not change the cost recovery you figured at the annuity starting date. Printable tax form 1040x The tax-free part of each annuity payment remains the same. Printable tax form 1040x    For more information about choosing or canceling a survivor annuity after retirement, contact OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. Printable tax form 1040x C. Printable tax form 1040x calling area must call 202-606-0500). Printable tax form 1040x Exclusion limit. Printable tax form 1040x   Your annuity starting date determines the total amount of annuity payments that you can exclude from income over the years. Printable tax form 1040x Annuity starting date after 1986. Printable tax form 1040x   If your annuity starting date is after 1986, the total amount of annuity income that you (or the survivor annuitant) can exclude over the years as a return of your cost cannot exceed your total cost. Printable tax form 1040x Annuity payments you or your survivors receive after the total cost in the plan has been recovered are generally fully taxable. Printable tax form 1040x Example. Printable tax form 1040x Your annuity starting date is after 1986 and you exclude $100 a month under the Simplified Method. Printable tax form 1040x If your cost is $12,000, the exclusion ends after 10 years (120 months). Printable tax form 1040x Thereafter, your entire annuity is generally fully taxable. Printable tax form 1040x Annuity starting date before 1987. Printable tax form 1040x   If your annuity starting date is before 1987, you can continue to take your monthly exclusion figured under the General Rule or Simplified Method for as long as you receive your annuity. Printable tax form 1040x If you chose a joint and survivor annuity, your survivor can continue to take that same exclusion. Printable tax form 1040x The total exclusion may be more than your cost. Printable tax form 1040x Deduction of unrecovered cost. Printable tax form 1040x   If your annuity starting date is after July 1, 1986, and the cost of your annuity has not been fully recovered at your (or the survivor annuitant's) death, a deduction is allowed for the unrecovered cost. Printable tax form 1040x The deduction is claimed on your (or your survivor's) final tax return as a miscellaneous itemized deduction (not subject to the 2%-of-adjusted-gross-income limit). Printable tax form 1040x If your annuity starting date is before July 2, 1986, no tax benefit is allowed for any unrecovered cost at death. Printable tax form 1040x Simplified Method If your annuity starting date is after November 18, 1996, you must use the Simplified Method to figure the tax-free part of your CSRS or FERS annuity. Printable tax form 1040x (OPM has figured the taxable amount of your annuity shown on your Form CSA 1099R using the Simplified Method. Printable tax form 1040x ) You could have chosen to use either the Simplified Method or the General Rule if your annuity starting date is after July 1, 1986, but before November 19, 1996. Printable tax form 1040x The Simplified Method does not apply if your annuity starting date is before July 2, 1986. Printable tax form 1040x Under the Simplified Method, you figure the tax-free part of each full monthly payment by dividing your cost by a number of months based on your age. Printable tax form 1040x This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. Printable tax form 1040x If your annuity starting date is after 1997 and your annuity includes a survivor benefit for your spouse, this number is based on your combined ages. Printable tax form 1040x Worksheet A. Printable tax form 1040x   Use Worksheet A. Printable tax form 1040x Simplified Method (near the end of this publication), to figure your taxable annuity. Printable tax form 1040x Be sure to keep the completed worksheet. Printable tax form 1040x It will help you figure your taxable amounts for later years. Printable tax form 1040x Instead of Worksheet A, you generally can use the Simplified Method Worksheet in the instructions for Form 1040, Form 1040A, or Form 1040NR to figure your taxable annuity. Printable tax form 1040x However, you must use Worksheet A and Worksheet B in this publication if you chose the alternative annuity option, discussed later. Printable tax form 1040x Line 2. Printable tax form 1040x   See Your cost , earlier, for an explanation of your cost in the plan. Printable tax form 1040x If your annuity starting date is after November 18, 1996, and you chose the alternative annuity option (explained later), you must reduce your cost by the tax-free part of the lump-sum payment you received. Printable tax form 1040x Line 3. Printable tax form 1040x   The number you enter on line 3 is the appropriate number from Table 1 or 2 representing approximate life expectancies in months. Printable tax form 1040x If your annuity starting date is after 1997, use: Table 1 for an annuity without a survivor benefit, or Table 2 for an annuity with a survivor benefit. Printable tax form 1040x If your annuity starting date is before 1998, use Table 1. Printable tax form 1040x Line 6. Printable tax form 1040x   If you received contributions tax free before 2013, the amount previously recovered tax free that you must enter on line 6 is the total amount from line 10 of last year's worksheet. Printable tax form 1040x If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, this amount includes the tax-free part of the lump-sum payment you received. Printable tax form 1040x Example. Printable tax form 1040x Bill Smith retired from the Federal Government on March 31, 2013, under an annuity that will provide a survivor benefit for his wife, Kathy. Printable tax form 1040x His annuity starting date is April 1, 2013, the annuity is paid in arrears, and he received his first monthly annuity payment on May 1, 2013. Printable tax form 1040x He must use the Simplified Method to figure the tax-free part of his annuity benefits. Printable tax form 1040x Bill's monthly annuity benefit is $1,000. Printable tax form 1040x He had contributed $31,000 to his retirement plan and had received no distributions before his annuity starting date. Printable tax form 1040x At his annuity starting date, he was 65 and Kathy was 57. Printable tax form 1040x Bill's completed Worksheet A is shown later. Printable tax form 1040x To complete line 3, he used Table 2 at the bottom of the worksheet and found that 310 is the number in the second column opposite the age range that includes 122 (his and Kathy's combined ages). Printable tax form 1040x Bill keeps a copy of the completed worksheet for his records. Printable tax form 1040x It will help him (and Kathy, if she survives him) figure the taxable amount of the annuity in later years. Printable tax form 1040x Bill's tax-free monthly amount is $100. Printable tax form 1040x (See line 4 of the worksheet. Printable tax form 1040x ) If he lives to collect more than 310 monthly payments, he will generally have to include in his gross income the full amount of any annuity payments received after 310 payments have been made. Printable tax form 1040x If Bill does not live to collect 310 monthly payments and his wife begins to receive monthly payments, she also will exclude $100 from each monthly payment until 310 payments (Bill's and hers) have been collected. Printable tax form 1040x If she dies before 310 payments have been made, a miscellaneous itemized deduction (not subject to the 2%-of-adjusted- gross-income limit) will be allowed for the unrecovered cost on her final income tax return. Printable tax form 1040x General Rule If your annuity starting date is after November 18, 1996, you cannot use the General Rule to figure the tax-free part of your CSRS or FERS annuity. Printable tax form 1040x If your annuity starting date is after July 1, 1986, but before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method. Printable tax form 1040x If your annuity starting date is before July 2, 1986, you could have chosen to use the General Rule only if you could not use the Three-Year Rule. Printable tax form 1040x Under the General Rule, you figure the tax-free part of each full monthly payment by multiplying the initial gross monthly rate of your annuity by an exclusion percentage. Printable tax form 1040x Figuring this percentage is complex and requires the use of actuarial tables. Printable tax form 1040x For these tables and other information about using the General Rule, see Publication 939. Printable tax form 1040x Three-Year Rule If your annuity starting date was before July 2, 1986, you probably had to report your annuity using the Three-Year Rule. Printable tax form 1040x Under this rule, you excluded all the annuity payments from income until you fully recovered your cost. Printable tax form 1040x After your cost was recovered, all payments became fully taxable. Printable tax form 1040x You cannot use another rule to again exclude amounts from income. Printable tax form 1040x The Three-Year Rule was repealed for retirees whose annuity starting date is after July 1, 1986. Printable tax form 1040x Worksheet A. Printable tax form 1040x Simplified Method for Bill Smith See the instructions in Part II of this publication under Simplified Method. Printable tax form 1040x 1. Printable tax form 1040x Enter the total pension or annuity payments received this year. Printable tax form 1040x Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. Printable tax form 1040x $ 8,000 2. Printable tax form 1040x Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. Printable tax form 1040x See Your cost in Part II, Rules for Retirees, earlier 2. Printable tax form 1040x 31,000 Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). Printable tax form 1040x Otherwise, go to line 3. Printable tax form 1040x   3. Printable tax form 1040x Enter the appropriate number from Table 1 below. Printable tax form 1040x But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below. Printable tax form 1040x 3. Printable tax form 1040x 310 4. Printable tax form 1040x Divide line 2 by the number on line 3 4. Printable tax form 1040x 100 5. Printable tax form 1040x Multiply line 4 by the number of months for which this year's payments were made. Printable tax form 1040x If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Printable tax form 1040x Otherwise, go to line 6 5. Printable tax form 1040x 800 6. Printable tax form 1040x Enter any amounts previously recovered tax free in years after 1986. Printable tax form 1040x This is the amount shown on line 10 of your worksheet for last year 6. Printable tax form 1040x 0 7. Printable tax form 1040x Subtract line 6 from line 2 7. Printable tax form 1040x 31,000 8. Printable tax form 1040x Enter the smaller of line 5 or line 7 8. Printable tax form 1040x 800 9. Printable tax form 1040x Taxable amount for year. Printable tax form 1040x Subtract line 8 from line 1. Printable tax form 1040x Enter the result, but not less than zero. Printable tax form 1040x Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. Printable tax form 1040x If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. Printable tax form 1040x If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. Printable tax form 1040x If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. Printable tax form 1040x $7,200 10. Printable tax form 1040x Was your annuity starting date before 1987?   Yes. Printable tax form 1040x Do not complete the rest of this worksheet. Printable tax form 1040x    No. Printable tax form 1040x Add lines 6 and 8. Printable tax form 1040x This is the amount you have recovered tax free through 2013. Printable tax form 1040x You will need this number if you need to fill out this worksheet next year 10. Printable tax form 1040x 800 11. Printable tax form 1040x Balance of cost to be recovered. Printable tax form 1040x Subtract line 10 from line 2. Printable tax form 1040x If zero, you will not have to complete this worksheet next year. Printable tax form 1040x The payments you receive next year will generally be fully taxable 11. Printable tax form 1040x $30,200 Table 1 for Line 3 Above    IF your age on your  annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   55 or under 300 360   56–60 260 310   61–65 240 260   66–70 170 210   71 or over 120 160  Table 2 for Line 3 Above    IF the annuitants' combined ages on your annuity starting date were   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. Printable tax form 1040x Alternative Annuity Option If you are eligible, you may choose an alternative form of annuity. Printable tax form 1040x If you make this choice, you will receive a lump-sum payment equal to your contributions to the plan and a reduced monthly annuity. Printable tax form 1040x You are eligible to make this choice if you meet all of the following requirements. Printable tax form 1040x You are retiring, but not on disability. Printable tax form 1040x You have a life-threatening illness or other critical medical condition. Printable tax form 1040x You do not have a former spouse entitled to court ordered benefits based on your service. Printable tax form 1040x If you are not eligible or do not choose this alternative annuity, you can skip the following discussion and go to Federal Gift Tax , later. Printable tax form 1040x Lump-Sum Payment The lump-sum payment you receive under the alternative annuity option generally has a tax-free part and a taxable part. Printable tax form 1040x The tax-free part represents part of your cost. Printable tax form 1040x The taxable part represents part of the earnings on your annuity contract. Printable tax form 1040x Your lump-sum credit (discussed later) may include a deemed deposit or redeposit that is treated as being included in your lump-sum payment even though you do not actually receive such amounts. Printable tax form 1040x Deemed deposits and redeposits, which are described later under Lump-sum credit , are taxable to you in the year of retirement. Printable tax form 1040x Your taxable amount may therefore be more than the lump-sum payment you receive. Printable tax form 1040x You must include the taxable part of the lump-sum payment in your income for the year you receive the payment unless you roll it over into another qualified plan or an IRA. Printable tax form 1040x If you do not have OPM transfer the taxable amount to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. Printable tax form 1040x See Rollover Rules , later, for information on how to make a rollover. Printable tax form 1040x OPM can make a direct rollover only up to the amount of the lump-sum payment. Printable tax form 1040x Therefore, to defer tax on the full taxable amount if it is more than the payment, you must add funds from another source. Printable tax form 1040x The taxable part of the lump-sum payment does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. Printable tax form 1040x It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55, even if you reach age 55 in the year you receive the lump-sum payment. Printable tax form 1040x For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. Printable tax form 1040x Worksheet B. Printable tax form 1040x   Use Worksheet B. Printable tax form 1040x Lump-Sum Payment (near the end of this publication), to figure the taxable part of your lump-sum payment. Printable tax form 1040x Be sure to keep the completed worksheet for your records. Printable tax form 1040x   To complete the worksheet, you will need to know the amount of your lump-sum credit and the present value of your annuity contract. Printable tax form 1040x Lump-sum credit. Printable tax form 1040x   Generally, this is the same amount as the lump-sum payment you receive (the total of your contributions to the retirement system). Printable tax form 1040x However, for purposes of the alternative annuity option, your lump-sum credit also may include deemed deposits and redeposits that OPM advanced to your retirement account so that you are given credit for the service they represent. Printable tax form 1040x Deemed deposits (including interest) are for federal employment during which no retirement contributions were taken out of your pay. Printable tax form 1040x Deemed redeposits (including interest) are for any refunds of retirement contributions that you received and did not repay. Printable tax form 1040x You are treated as if you had received a lump-sum payment equal to the amount of your lump-sum credit and then had made a repayment to OPM of the advanced amounts. Printable tax form 1040x Present value of your annuity contract. Printable tax form 1040x   The present value of your annuity contract is figured using actuarial tables provided by the IRS. Printable tax form 1040x If you are receiving a lump-sum payment under the Alternative Annuity Option, you can write to the address below to find out the present value of your annuity contract. Printable tax form 1040x Internal Revenue Service Attn: Actuarial Group 2 TE/GE SE:T:EP:RA:T:A2 NCA-629 1111 Constitution Ave. Printable tax form 1040x , NW Washington, DC 20224-0002 Example. Printable tax form 1040x David Brown retired from the federal government in 2013, one month after his 55th birthday. Printable tax form 1040x He had contributed $31,000 to his retirement plan and chose to receive a lump-sum payment of that amount under the alternative annuity option. Printable tax form 1040x The present value of his annuity contract was $155,000. Printable tax form 1040x The tax-free part and the taxable part of the lump-sum payment are figured using Worksheet B, as shown below. Printable tax form 1040x The taxable part ($24,800) is also his net cost in the plan, which is used to figure the taxable part of his reduced annuity payments. Printable tax form 1040x See Reduced Annuity , later. Printable tax form 1040x Worksheet B. Printable tax form 1040x Lump-Sum Payment for David Brown See the instructions in Part II of this publication under Alternative Annuity Option . Printable tax form 1040x  1. Printable tax form 1040x Enter your lump-sum credit (your cost in the plan at the annuity starting date) 1. Printable tax form 1040x $ 31,000 2. Printable tax form 1040x Enter the present value of your annuity contract 2. Printable tax form 1040x 155,000 3. Printable tax form 1040x Divide line 1 by line 2 3. Printable tax form 1040x . Printable tax form 1040x 20 4. Printable tax form 1040x Tax-free amount. Printable tax form 1040x Multiply line 1 by line 3. Printable tax form 1040x (Caution: Do not include this amount on line 6 of Worksheet A in this publication. Printable tax form 1040x ) 4. Printable tax form 1040x $6,200 5. Printable tax form 1040x Taxable amount (net cost in the plan). Printable tax form 1040x Subtract line 4 from line 1. Printable tax form 1040x Include this amount in the total on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Printable tax form 1040x Also, enter this amount on line 2 of Worksheet A in this publication. Printable tax form 1040x 5. Printable tax form 1040x $24,800   Lump-sum payment in installments. Printable tax form 1040x   If you choose the alternative annuity option, you usually will receive the lump-sum payment in two equal installments. Printable tax form 1040x You will receive the first installment after you make the choice upon retirement. Printable tax form 1040x The second installment will be paid to you, with interest, in the next calendar year. Printable tax form 1040x (Exceptions to the installment rule are provided for cases of critical medical need. Printable tax form 1040x )   Even though the lump-sum payment is made in installments, the overall tax treatment (explained at the beginning of this discussion) is the same as if the whole payment were paid at once. Printable tax form 1040x If the payment has a tax-free part, you must treat the taxable part as received first. Printable tax form 1040x How to report. Printable tax form 1040x   Add any actual or deemed payment of your lump-sum credit (defined earlier) to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. Printable tax form 1040x Add the taxable part to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b, unless you roll over the taxable part to your traditional IRA or a qualified retirement plan. Printable tax form 1040x    If you receive the lump-sum payment in two installments, include any interest paid with the second installment on line 8a of either Form 1040 or Form 1040A, or on line 9a of Form 1040NR. Printable tax form 1040x Reduced Annuity If you have chosen to receive a lump-sum payment under the alternative annuity option, you also will receive reduced monthly annuity payments. Printable tax form 1040x These annuity payments each will have a tax-free and a taxable part. Printable tax form 1040x To figure the tax-free part of each annuity payment, you must use the Simplified Method (Worksheet A). Printable tax form 1040x For instructions on how to complete the worksheet, see Worksheet A under Simplified Method, earlier. Printable tax form 1040x To complete Worksheet A, line 2, you must reduce your cost in the plan by the tax-free part of the lump-sum payment you received. Printable tax form 1040x Enter as your net cost on line 2 the amount from Worksheet B, line 5. Printable tax form 1040x Do not include the tax-free part of the lump-sum payment with other amounts recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. Printable tax form 1040x Example. Printable tax form 1040x The facts are the same as in the example for David Brown in the preceding discussion. Printable tax form 1040x In addition, David received 10 annuity payments in 2013 of $1,200 each. Printable tax form 1040x Using Worksheet A, he figures the taxable part of his annuity payments. Printable tax form 1040x He completes line 2 by reducing his $31,000 cost by the $6,200 tax-free part of his lump-sum payment. Printable tax form 1040x His entry on line 2 is his $24,800 net cost in the plan (the amount from Worksheet B, line 5). Printable tax form 1040x He does not include the tax-free part of his lump-sum payment on Worksheet A, line 6. Printable tax form 1040x David's filled-in Worksheet A is shown on the next page. Printable tax form 1040x Worksheet A. Printable tax form 1040x Simplified Method for David Brown See the instructions in Part II of this publication under Simplified Method . Printable tax form 1040x 1. Printable tax form 1040x Enter the total pension or annuity payments received this year. Printable tax form 1040x Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. Printable tax form 1040x $ 12,000 2. Printable tax form 1040x Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. Printable tax form 1040x See Your cost in Part II, Rules for Retirees, earlier 2. Printable tax form 1040x 24,800 Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). Printable tax form 1040x Otherwise, go to line 3. Printable tax form 1040x   3. Printable tax form 1040x Enter the appropriate number from Table 1 below. Printable tax form 1040x But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below. Printable tax form 1040x 3. Printable tax form 1040x 360 4. Printable tax form 1040x Divide line 2 by the number on line 3 4. Printable tax form 1040x 68. Printable tax form 1040x 89 5. Printable tax form 1040x Multiply line 4 by the number of months for which this year's payments were made. Printable tax form 1040x If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Printable tax form 1040x Otherwise, go to line 6 5. Printable tax form 1040x 688. Printable tax form 1040x 90 6. Printable tax form 1040x Enter any amounts previously recovered tax free in years after 1986. Printable tax form 1040x This is the amount shown on line 10 of your worksheet for last year 6. Printable tax form 1040x 0 7. Printable tax form 1040x Subtract line 6 from line 2 7. Printable tax form 1040x 24,800 8. Printable tax form 1040x Enter the smaller of line 5 or line 7 8. Printable tax form 1040x 688. Printable tax form 1040x 90 9. Printable tax form 1040x Taxable amount for year. Printable tax form 1040x Subtract line 8 from line 1. Printable tax form 1040x Enter the result, but not less than zero. Printable tax form 1040x Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. Printable tax form 1040x If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. Printable tax form 1040x If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. Printable tax form 1040x If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. Printable tax form 1040x $11,311. Printable tax form 1040x 10 10. Printable tax form 1040x Was your annuity starting date before 1987?   Yes. Printable tax form 1040x Do not complete the rest of this worksheet. Printable tax form 1040x    No. Printable tax form 1040x Add lines 6 and 8. Printable tax form 1040x This is the amount you have recovered tax free through 2013. Printable tax form 1040x You will need this number if you need to fill out this worksheet next year 10. Printable tax form 1040x 688. Printable tax form 1040x 90 11. Printable tax form 1040x Balance of cost to be recovered. Printable tax form 1040x Subtract line 10 from line 2. Printable tax form 1040x If zero, you will not have to complete this worksheet next year. Printable tax form 1040x The payments you receive next year will generally be fully taxable 11. Printable tax form 1040x $24,111. Printable tax form 1040x 10 Table 1 for Line 3 Above    IF your age on your annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   55 or under 300 360   56–60 260 310   61–65 240 260   66–70 170 210   71 or over 120 160  Table 2 for Line 3 Above    IF the annuitants' combined ages on your annuity starting date were   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. Printable tax form 1040x Reemployment after choosing the alternative annuity option. Printable tax form 1040x If you chose this option when you retired and then you were reemployed by the Federal Government before retiring again, your Form CSA 1099R may show only the amount of your contributions to your retirement plan during your reemployment. Printable tax form 1040x If the amount on the form does not include all your contributions, disregard it and use your total contributions to figure the taxable part of your annuity payments. Printable tax form 1040x Annuity starting date before November 19, 1996. Printable tax form 1040x   If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, the taxable and tax-free parts of your lump-sum payment and your annuity payments are figured using different rules. Printable tax form 1040x Under those rules, you do not reduce your cost in the plan (Worksheet A, line 2) by the tax-free part of the lump-sum payment. Printable tax form 1040x However, you must include that tax-free amount with other amounts previously recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. Printable tax form 1040x Federal Gift Tax If, through the exercise or nonexercise of an election or option, you provide an annuity for your beneficiary at or after your death, you have made a gift. Printable tax form 1040x The gift may be taxable for gift tax purposes. Printable tax form 1040x The value of the gift is equal to the value of the annuity. Printable tax form 1040x Joint and survivor annuity. Printable tax form 1040x   If the gift is an interest in a joint and survivor annuity where only you and your spouse can receive payments before the death of the last spouse to die, the gift generally will qualify for the unlimited marital deduction. Printable tax form 1040x This will eliminate any gift tax liability with regard to that gift. Printable tax form 1040x   If you provide survivor annuity benefits for someone other than your current spouse, such as your former spouse, the unlimited marital deduction will not apply. Printable tax form 1040x This may result in a taxable gift. Printable tax form 1040x More information. Printable tax form 1040x   For information about the gift tax, see Publication 950, Introduction to Estate and Gift Taxes, and Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, and its instructions. Printable tax form 1040x Retirement During the Past Year If you have recently retired, the following discussions covering annual leave, voluntary contributions, and community property may apply to you. Printable tax form 1040x Annual leave. Printable tax form 1040x   A payment for accrued annual leave received on retirement is a salary payment. Printable tax form 1040x It is taxable as wages in the tax year you receive it. Printable tax form 1040x Voluntary contributions. Printable tax form 1040x   Voluntary contributions to the retirement fund are those made in addition to the regular contributions that were deducted from your salary. Printable tax form 1040x They also include the regular contributions withheld from your salary after you have the years of service necessary for the maximum annuity allowed by law. Printable tax form 1040x Voluntary contributions are not the same as employee contributions to the Thrift Savings Plan. Printable tax form 1040x See Thrift Savings Plan , later. Printable tax form 1040x Additional annuity benefit. Printable tax form 1040x   If you choose to receive an additional annuity benefit from your voluntary contributions, it is treated separately from the annuity benefit that comes from the regular contributions deducted from your salary. Printable tax form 1040x This separate treatment applies for figuring the amounts to be excluded from, and included in, gross income. Printable tax form 1040x It does not matter that you receive only one monthly check covering both benefits. Printable tax form 1040x Each year you will receive a Form CSA 1099R that will show how much of your total annuity received in the past year was from each type of benefit. Printable tax form 1040x   Figure the taxable and tax-free parts of your additional monthly benefits from voluntary contributions using the rules that apply to regular CSRS and FERS annuities, as explained earlier. Printable tax form 1040x Refund of voluntary contributions. Printable tax form 1040x   If you choose to receive a refund of your voluntary contributions plus accrued interest, the interest is taxable to you in the tax year it is distributed unless you roll it over to a traditional IRA or another qualified retirement plan. Printable tax form 1040x If you do not have OPM transfer the interest to a traditional IRA or other qualified retirement plan in a direct rollover, tax will be withheld at a 20% rate. Printable tax form 1040x See Rollover Rules , later. Printable tax form 1040x The interest does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. Printable tax form 1040x It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55. Printable tax form 1040x For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. Printable tax form 1040x Community property laws. Printable tax form 1040x   State community property laws apply to your annuity. Printable tax form 1040x These laws will affect your income tax only if you file a return separately from your spouse. Printable tax form 1040x   Generally, the determination of whether your annuity is separate income (taxable to you) or community income (taxable to both you and your spouse) is based on your marital status and domicile when you were working. Printable tax form 1040x Regardless of whether you are now living in a community property state or a noncommunity property state, your current annuity may be community income if it is based on services you performed while married and domiciled in a community property state. Printable tax form 1040x   At any time, you have only one domicile even though you may have more than one home. Printable tax form 1040x Your domicile is your fixed and permanent legal home that you intend to use for an indefinite or unlimited period, and to which, when absent, you intend to return. Printable tax form 1040x The question of your domicile is mainly a matter of your intentions as indicated by your actions. Printable tax form 1040x   If your annuity is a mixture of community income and separate income, you must divide it between the two kinds of income. Printable tax form 1040x The division is based on your periods of service and domicile in community and noncommunity property states while you were married. Printable tax form 1040x   For more information, see Publication 555, Community Property. Printable tax form 1040x Reemployment After Retirement If you retired from federal service and are later rehired by the Federal Government as an employee, you can continue to receive your annuity during reemployment. Printable tax form 1040x The employing agency usually will pay you the difference between your salary for your period of reemployment and your annuity. Printable tax form 1040x This amount is taxable as wages. Printable tax form 1040x Your annuity will continue to be taxed just as it was before. Printable tax form 1040x If you are still recovering your cost, you continue to do so. Printable tax form 1040x If you have recovered your cost, the annuity you receive while you are reemployed generally is fully taxable. Printable tax form 1040x Nonresident Aliens The following special rules apply to nonresident alien federal employees performing services outside the United States and to nonresident alien retirees and beneficiaries. Printable tax form 1040x A nonresident alien is an individual who is not a citizen or a resident alien of the United States. Printable tax form 1040x Special rule for figuring your total contributions. Printable tax form 1040x   Your contributions to the retirement plan (your cost) also include the government's contributions to the plan to a certain extent. Printable tax form 1040x You include government contributions that would not have been taxable to you at the time they were contributed if they had been paid directly to you. Printable tax form 1040x For example, government contributions would not have been taxable to you if, at the time made, your services were performed outside the United States. Printable tax form 1040x Thus, your cost is increased by these government contributions and the benefits that you, or your beneficiary, must include in income are reduced. Printable tax form 1040x   This method of figuring your total contributions does not apply to any contributions the government made on your behalf after you became a citizen or a resident alien of the United States. Printable tax form 1040x Limit on taxable amount. Printable tax form 1040x   There is a limit on the taxable amount of payments received from the CSRS, the FERS, or the TSP by a nonresident alien retiree or nonresident alien beneficiary. Printable tax form 1040x Figure this limited taxable amount by multiplying the otherwise taxable amount by a fraction. Printable tax form 1040x The numerator of the fraction is the retiree's total U. Printable tax form 1040x S. Printable tax form 1040x Government basic pay, other than tax-exempt pay for services performed outside the United States. Printable tax form 1040x The denominator is the retiree's total U. Printable tax form 1040x S. Printable tax form 1040x Government basic pay for all services. Printable tax form 1040x    Basic pay includes regular pay plus any standby differential. Printable tax form 1040x It does not include bonuses, overtime pay, certain retroactive pay, uniform or other allowances, or lump-sum leave payments. Printable tax form 1040x   To figure the limited taxable amount of your CSRS or FERS annuity or your TSP distributions, use Worksheet C. Printable tax form 1040x (For an annuity, first complete Worksheet A in this publication. Printable tax form 1040x ) Worksheet C. Printable tax form 1040x Limited Taxable Amount for Nonresident Alien 1. Printable tax form 1040x Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. Printable tax form 1040x   2. Printable tax form 1040x Enter the total U. Printable tax form 1040x S. Printable tax form 1040x Government basic pay other than tax-exempt pay for services performed outside the United States 2. Printable tax form 1040x   3. Printable tax form 1040x Enter the total U. Printable tax form 1040x S. Printable tax form 1040x Government basic pay for all services 3. Printable tax form 1040x   4. Printable tax form 1040x Divide line 2 by line 3 4. Printable tax form 1040x   5. Printable tax form 1040x Limited taxable amount. Printable tax form 1040x Multiply line 1 by line 4. Printable tax form 1040x Enter this amount on Form 1040NR, line 17b 5. Printable tax form 1040x   Example 1. Printable tax form 1040x You are a nonresident alien who performed all services for the U. Printable tax form 1040x S. Printable tax form 1040x Government abroad as a nonresident alien. Printable tax form 1040x You retired and began to receive a monthly annuity of $200. Printable tax form 1040x Your total basic pay for all services for the U. Printable tax form 1040x S. Printable tax form 1040x Government was $100,000. Printable tax form 1040x All of your basic pay was tax exempt because it was not U. Printable tax form 1040x S. Printable tax form 1040x source income. Printable tax form 1040x The taxable amount of your annuity using Worksheet A in this publication is $720. Printable tax form 1040x You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. Printable tax form 1040x Worksheet C. Printable tax form 1040x Limited Taxable Amount for Nonresident Alien — Example 1 1. Printable tax form 1040x Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. Printable tax form 1040x $ 720 2. Printable tax form 1040x Enter the total U. Printable tax form 1040x S. Printable tax form 1040x Government basic pay other than tax-exempt pay for services performed outside the United States 2. Printable tax form 1040x 0 3. Printable tax form 1040x Enter the total U. Printable tax form 1040x S. Printable tax form 1040x Government basic pay for all services 3. Printable tax form 1040x 100,000 4. Printable tax form 1040x Divide line 2 by line 3 4. Printable tax form 1040x 0 5. Printable tax form 1040x Limited taxable amount. Printable tax form 1040x Multiply line 1 by line 4. Printable tax form 1040x Enter this amount on Form 1040NR, line 17b 5. Printable tax form 1040x 0 Example 2. Printable tax form 1040x You are a nonresident alien who performed services for the U. Printable tax form 1040x S. Printable tax form 1040x Government as a nonresident alien both within the United States and abroad. Printable tax form 1040x You retired and began to receive a monthly annuity of $240. Printable tax form 1040x Your total basic pay for your services for the U. Printable tax form 1040x S. Printable tax form 1040x Government was $120,000; $40,000 was for work done in the United States and $80,000 was for your work done in a foreign country. Printable tax form 1040x The part of your total basic pay for your work done in a foreign country was tax exempt because it was not U. Printable tax form 1040x S. Printable tax form 1040x source income. Printable tax form 1040x The taxable amount of your annuity figured using Worksheet A in this publication is $1,980. Printable tax form 1040x You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. Printable tax form 1040x Worksheet C. Printable tax form 1040x Limited Taxable Amount for Nonresident Alien — Example 2 1. Printable tax form 1040x Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. Printable tax form 1040x $ 1,980 2. Printable tax form 1040x Enter the total U. Printable tax form 1040x S. Printable tax form 1040x Government basic pay other than tax-exempt pay for services performed outside the United States 2. Printable tax form 1040x 40,000 3. Printable tax form 1040x Enter the total U. Printable tax form 1040x S. Printable tax form 1040x Government basic pay for all services 3. Printable tax form 1040x 120,000 4. Printable tax form 1040x Divide line 2 by line 3 4. Printable tax form 1040x . Printable tax form 1040x 333 5. Printable tax form 1040x Limited taxable amount. Printable tax form 1040x Multiply line 1 by line 4. Printable tax form 1040x Enter this amount on Form 1040NR, line 17b 5. Printable tax form 1040x 659 Thrift Savings Plan Generally, all of the money in your TSP account is taxed as ordinary income when you receive it. Printable tax form 1040x (However, see Roth TSP balance and Uniformed services TSP accounts, next. Printable tax form 1040x ) This is because neither the contributions to your traditional TSP balance nor its earnings have been included previously in your taxable income. Printable tax form 1040x The way that you withdraw your account balance determines when you must pay the tax. Printable tax form 1040x Roth TSP balance. Printable tax form 1040x   The TSP also offers a Roth TSP option, which allows you to make after-tax contributions into your TSP account. Printable tax form 1040x This means Roth TSP contributions are included in your income. Printable tax form 1040x The contribution limits are the same as the traditional TSP. Printable tax form 1040x You can elect to have part or all of your TSP contributions designated as a Roth TSP. Printable tax form 1040x Agency contributions will be part of your traditional TSP balance. Printable tax form 1040x Also, you cannot roll over any portion of your traditional TSP into your Roth TSP. Printable tax form 1040x   Qualified distributions from your Roth TSP are not included in income. Printable tax form 1040x This applies to both your cost in the account and income earned on that account. Printable tax form 1040x A qualified distribution is generally a distribution that is: Made after a 5-tax-year period of participation, and Made on or after the date you reach age 59½, made to a beneficiary or your estate on or after your death, or attributable to your being disabled. Printable tax form 1040x   For more information, go to the TSP website, www. Printable tax form 1040x tsp. Printable tax form 1040x gov, or the TSP Service Office. Printable tax form 1040x See Publication 575, Pension and Annuity Income, for more information about designated Roth accounts. Printable tax form 1040x Uniformed services TSP accounts. Printable tax form 1040x   If you have a uniformed services TSP account that includes contributions from combat zone pay, the distributions attributable to those contributions are tax exempt. Printable tax form 1040x However, any earnings on those contributions to a traditional TSP balance are subject to tax when they are distributed. Printable tax form 1040x See Roth TSP balance discussed previously to get more information about Roth contributions. Printable tax form 1040x The statement you receive from the TSP will separately state the total amount of your distribution and the amount of your taxable distribution for the year. Printable tax form 1040x You can get more information from the TSP website, www. Printable tax form 1040x tsp. Printable tax form 1040x gov, or the TSP Service Office. Printable tax form 1040x Direct rollover by the TSP. Printable tax form 1040x   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a traditional IRA or other qualified retirement plan, the tax on that part is deferred until you receive payments from the traditional IRA or other plan. Printable tax form 1040x However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. Printable tax form 1040x Also, see Rollover Rules , later. Printable tax form 1040x Direct rollover by the TSP to a Roth IRA. Printable tax form 1040x   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a Roth IRA, the amount transferred will be taxed in the current year. Printable tax form 1040x However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. Printable tax form 1040x Also, see Rollovers to Roth IRAs for more information, later. Printable tax form 1040x Note. Printable tax form 1040x A direct rollover of your Roth contributions and its earnings (if certain conditions are met, see Roth TSP balance , earlier) in your TSP account to a Roth 401(k), Roth 403(b), Roth 457(b), or Roth IRA are not subject to tax when they are transferred or when you receive payments from those accounts at a later date. Printable tax form 1040x This is because you already paid tax on those contributions. Printable tax form 1040x You cannot rollover Roth contributions and its earnings in your TSP account to a traditional IRA. Printable tax form 1040x TSP annuity. Printable tax form 1040x   If you ask the TSP to buy an annuity with the money in your account, from traditional contributions and its earnings, the annuity payments are taxed when you receive them. Printable tax form 1040x The payments are not subject to the additional 10% tax on early distributions, even if you are under age 55 when they begin. Printable tax form 1040x However, there is no tax on the annuity payments if the annuity is purchased using the money in your account from Roth contributions and its earnings if certain conditions are met. Printable tax form 1040x See Roth TSP balance , earlier. Printable tax form 1040x This is because you already paid tax on those contributions. Printable tax form 1040x Cash withdrawals. Printable tax form 1040x   If you withdraw any of the money in your TSP account, from traditional contributions and its earnings, it is generally taxed as ordinary income when you receive it unless you roll it over into a traditional IRA or other qualified plan. Printable tax form 1040x (See Rollover Rules , later. Printable tax form 1040x ) If you receive your entire TSP account balance in a single tax year, you may be able to use the 10-year tax option to figure your tax. Printable tax form 1040x See Lump-Sum Distributions in Publication 575 for details. Printable tax form 1040x However, there is no tax if you withdraw money in your TSP account from Roth contributions and its earnings if certain conditions are met. Printable tax form 1040x See Roth TSP balance , earlier. Printable tax form 1040x    To qualify for the 10-year tax option, the plan participant must have been born before January 2, 1936. Printable tax form 1040x   If you receive a single payment or you choose to receive your account balance in monthly payments over a period of less than 10 years, the TSP generally must withhold 20% for federal income tax. Printable tax form 1040x If you choose to receive your account balance in monthly payments over a period of 10 or more years or a period based on your life expectancy, the payments are subject to withholding as if you are married with three withholding allowances, unless you submit a withholding certificate. Printable tax form 1040x See also Withholding from Thrift Savings Plan payments earlier under Tax Withholding and Estimated Tax in Part I. Printable tax form 1040x However, there is no withholding requirement for amounts withdrawn from your TSP account that is from Roth contributions and its earnings, if certain conditions are met. Printable tax form 1040x See Roth TSP balance , earlier, for a discussion of those conditions. Printable tax form 1040x Tax on early distributions. Printable tax form 1040x   Any money paid to you from your TSP account before you reach age 59½ may be subject to an additional 10% tax on early distributions. Printable tax form 1040x However, this additional tax does not apply in certain situations, including any of the following. Printable tax form 1040x You receive the distribution and separate from government service during or after the calendar year in which you reach age 55. Printable tax form 1040x You choose to receive your account balance in monthly payments based on your life expectancy. Printable tax form 1040x You are totally and permanently disabled. Printable tax form 1040x You receive amounts from your Roth contributions since that represents a return of your cost (after-tax money). Printable tax form 1040x The earnings may be subject to the 10% tax depending on whether you met certain conditions. Printable tax form 1040x See Roth TSP balance , earlier. Printable tax form 1040x   For more information, see Tax on Early Distributions in Publication 575. Printable tax form 1040x Outstanding loan. Printable tax form 1040x   If the TSP declares a distribution from your account because money you borrowed has not been repaid when you separate from government service, your account is reduced and the amount of the distribution (your unpaid loan balance and any unpaid interest), from traditional contributions and its earnings, is taxed in the year declared. Printable tax form 1040x The distribution also may be subject to the additional 10% tax on early distributions. Printable tax form 1040x However, the tax will be deferred if you make a rollover contribution to a traditional IRA or other qualified plan equal to the declared distribution amount. Printable tax form 1040x See Rollover Rules , later. Printable tax form 1040x   If you withdraw any money from your TSP account in that same year, the TSP must withhold income tax of 20% of the total of the declared distribution and the amount withdrawn. Printable tax form 1040x However, no withholding is required for portions of the distribution that is from Roth contributions and its earnings, if certain conditions are met. Printable tax form 1040x See Roth TSP balance , earlier. Printable tax form 1040x More information. Printable tax form 1040x   For more information about the TSP, see Summary of the Thrift Savings Plan, distributed to all federal employees. Printable tax form 1040x Also, see Important Tax Information About Payments From Your TSP Account and Special Tax Withholding Rules for Thrift Savings Plan Payments to Nonresident Aliens, which are available from your agency personnel office or from the TSP by calling 1-TSP-YOU-FIRST (1-877-968-3778) and for participants who are deaf, hard of hearing, or have a speech disability, call 1-TSP-THRIFT5 (1-877-847-4385). Printable tax form 1040x    The above documents are also available on the TSP website at www. Printable tax form 1040x tsp. Printable tax form 1040x gov. Printable tax form 1040x Select “Forms & Publications. Printable tax form 1040x ” Rollover Rules Generally, a rollover is a tax-free withdrawal of cash or other assets from one qualified retirement plan or traditional IRA and its reinvestment in another qualified retirement plan or traditional IRA. Printable tax form 1040x You do not include the amount rolled over in your income, and you cannot take a deduction for it. Printable tax form 1040x The amount rolled over is taxed later as the new program pays that amount to you. Printable tax form 1040x If you roll over amounts into a traditional IRA, later distributions of these amounts from the traditional IRA do not qualify for the capital gain or the 10-year tax option. Printable tax form 1040x However, capital gain treatment or the 10-year tax option will be restored if the traditional IRA contains only amounts rolled over from a qualified plan and these amounts are rolled over from the traditional IRA into a qualified retirement plan. Printable tax form 1040x To qualify for the capital gain treatment or 10-year tax option, the plan participant must have been born before January 2, 1936. Printable tax form 1040x You can also roll over a distribution from a qualified retirement plan into a Roth IRA. Printable tax form 1040x Although the transfer of a distribution into a Roth IRA is considered a rollover for Roth IRA purposes, it is not a tax-free transfer unless you are rolling over amounts from Roth contributions and its earnings. Printable tax form 1040x See Rollovers to Roth IRAs , later, for more information. Printable tax form 1040x Qualified retirement plan. Printable tax form 1040x   For this purpose, a qualified retirement plan generally is: A qualified employee plan, A qualified employee annuity, A tax-sheltered annuity plan (403(b) plan), or An eligible state or local government section 457 deferred compensation plan. Printable tax form 1040x The CSRS, FERS, and TSP are considered qualified retirement plans. Printable tax form 1040x Distributions eligible for rollover treatment. Printable tax form 1040x   If you receive a refund of your CSRS or FERS contributions when you leave government service, you can roll over any interest you receive on the contributions. Printable tax form 1040x You cannot roll over any part of your CSRS or FERS annuity payments. Printable tax form 1040x   You can roll over a distribution of any part of your TSP account balance except: A distribution of your account balance that you choose to receive in monthly payments over: Your life expectancy, The joint life expectancies of you and your beneficiary, or A period of 10 years or more, A required minimum distribution generally beginning at age 70½, A declared distribution because of an unrepaid loan, if you have not separated from government service (see Outstanding loan under Thrift Savings Plan, earlier), or A hardship distribution. Printable tax form 1040x   In addition, a distribution to your beneficiary generally is not treated as an eligible rollover distribution. Printable tax form 1040x However, see Qualified domestic relations order (QDRO) and Rollovers by surviving spouse , and Rollovers by nonspouse beneficiary , later. Printable tax form 1040x Direct rollover option. Printable tax form 1040x   You can choose to have the OPM or TSP transfer any part of an eligible rollover distribution directly to another qualified retirement plan that accepts rollover distributions or to a traditional IRA or Roth IRA. Printable tax form 1040x   There is an automatic rollover requirement for mandatory distributions. Printable tax form 1040x A mandatory distribution is a distribution made without your consent and before you reach age 62 or normal retirement age, whichever is later. Printable tax form 1040x The automatic rollover requirement applies if the distribution is more than $1,000 and is an eligible rollover distribution. Printable tax form 1040x You can choose to have the distribution paid directly to you or rolled over directly to your traditional or Roth IRA or another qualified retirement plan. Printable tax form 1040x If you do not make this choice, OPM will automatically roll over the distribution into an IRA of a designated trustee or issuer. Printable tax form 1040x No tax withheld. Printable tax form 1040x   If you choose the direct rollover option or have an automatic rollover, no tax will be withheld from any part of the distribution that is directly paid to the trustee of the other plan. Printable tax form 1040x However, if the rollover is to a Roth IRA, you may want to choose to have tax withheld since any amount rolled over is generally included in income. Printable tax form 1040x Any part of the eligible rollover distribution paid to you is subject to withholding at a 20% rate. Printable tax form 1040x Direct roll over amounts from Roth contributions and its earnings do not have tax withheld because you already paid tax on those amounts. Printable tax form 1040x Payment to you option. Printable tax form 1040x   If an eligible rollover distribution is paid to you, the OPM or TSP must withhold 20% for income tax even if you plan to roll over the distribution to another qualified retirement plan, traditional or Roth IRA. Printable tax form 1040x However, the full amount is treated as distributed to you even though you actually receive only 80%. Printable tax form 1040x You generally must include in income any part (including the part withheld) that you do not roll over within 60 days to another qualified retirement plan or to a traditional IRA. Printable tax form 1040x Rollovers to Roth IRAs are generally included in income. Printable tax form 1040x Eligible rollover distributions that are from Roth contributions do not have tax withheld because you already paid tax on those amounts. Printable tax form 1040x If you leave government service before the calendar year in which you reach age 55 and are under age 59½ when a distribution is paid to you, you may have to pay an additional 10% tax on any part, including any tax withheld, that you do not roll over. Printable tax form 1040x However, distributions from Roth contributions will not be subject to the 10% additional tax because it is a return of your cost (after-tax money). Printable tax form 1040x Earnings from those contributions may be subject to the 10% additional tax if certain conditions are not met. Printable tax form 1040x See Roth TSP balance , earlier. Printable tax form 1040x Also, see Tax on Early Distributions in Publication 575. Printable tax form 1040x Exception to withholding. Printable tax form 1040x   Withholding from an eligible rollover distribution paid to you is not required if the distributions for your tax year total less than $200. Printable tax form 1040x Partial rollovers. Printable tax form 1040x   A lump-sum distribution may qualify for capital gain treatment or the 10-year tax option if the plan participant was born before January 2, 1936. Printable tax form 1040x See Lump-Sum Distributions in Publication 575. Printable tax form 1040x However, if you roll over any part of the distribution, the part you keep does not qualify for this special tax treatment. Printable tax form 1040x Rolling over more than amount received. Printable tax form 1040x   If you want to roll over more of an eligible rollover distribution than the amount you received after income tax was withheld, you will have to add funds from some other source (such as your savings or borrowed amounts). Printable tax form 1040x Example. Printable tax form 1040x You left government service at age 53. Printable tax form 1040x On February 1, 2013, you receive an eligible rollover distribution of $10,000 from you