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Procedure to amend a 2022 tax return for missed rental depreciation

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January 18, 2024

To amend a 2022 tax return for missed rental depreciation, you would need to follow these steps:

  1. Obtain Form 1040X: This is the form used to amend a previously filed tax return. You can download it from the IRS website.

  2. Complete Form 1040X: Fill out the form, paying special attention to the section that asks for the reason for the amendment. Here, you should explain that you missed claiming depreciation on your rental property.

  3. Adjust Your Income: On Form 1040X, you'll need to adjust your income to reflect the depreciation you should have claimed. This will reduce your taxable income.

  4. Recalculate Your Tax: After adjusting your income, you'll need to recalculate your tax liability. If the depreciation results in a lower tax liability, you may be due a refund.

  5. Attach Relevant Forms: If you originally used Schedule E (Supplemental Income and Loss) to report your rental income and expenses, you'll need to fill out a new Schedule E with the correct depreciation and attach it to Form 1040X. Also, if you haven't done so in the past, you'll need to fill out Form 4562 (Depreciation and Amortization) to calculate your depreciation deduction.

  6. Submit the Form: Once you've completed Form 1040X and any other necessary forms, mail them to the IRS. The mailing address can be found in the instructions for Form 1040X.

    Remember, it's important to keep copies of all documents for your records. Also, amending a tax return can be complex, so you may want to consider seeking help from a tax professional.

    Please note that the IRS typically allows taxpayers to amend returns within three years from the date of the original return or within two years of the date the tax was paid, whichever is later. So, for a 2022 tax return, you generally have until sometime in 2025 to file an amended return.
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June 18, 2024

Reducing the basis of depreciable property for investment tax credit purposes involves specific steps and considerations. Here’s a general guide based on the information provided:### Steps to Reduce the Basis of Depreciable Property:1. Determine the Amount of Canceled Debt: - Identify the amount of canceled debt that is excluded from income. This amount will be used to reduce the basis of your depreciable property.2. Elect to Reduce Basis: - You can elect to reduce the basis of depreciable property before reducing other tax attributes. This election is made on Form 982.3. Order of Basis Reduction: - The basis of depreciable property is reduced in the following order: 1. Depreciable real property used in your trade or business or held for investment that secured the canceled debt. 2. Depreciable personal property used in your trade or business or held for investment that secured the canceled debt. 3. Other depreciable property used in your trade or business or held for investment. 4. Real property held primarily for sale to customers if you elect to treat it as if it were depreciable property on Form 982.4. Limitations on Basis Reduction: - The basis reduction is limited to the total adjusted basis of all your depreciable property. Depreciable property for this purpose means any property subject to depreciation or amortization, but only if a reduction of basis will reduce the depreciation or amortization otherwise allowable for the period immediately following the basis reduction. - If the amount of canceled debt excluded from income is more than the total basis in depreciable property, the excess must be used to reduce other tax attributes in the order described under "All other tax attributes."5. Recapture of Basis Reductions: - If you reduce the basis of property and later sell or otherwise dispose of the property at a gain, the part of the gain due to this basis reduction is taxable as ordinary income under the depreciation recapture provisions. - Treat any property that isn't section 1245 or section 125 property as section 1245 property. For section 125 property, determine the depreciation adjustments that would have resulted under the straight-line method as if there were no basis reduction for debt cancellation.6. Filing Form 982: - Use Form 982 to make the election to reduce the basis of depreciable property. The election can be revoked only with IRS consent.### Example:Suppose you have $50,000 of canceled debt that is excluded from income. You have the following depreciable properties:- Depreciable real property with an adjusted basis of $30,000.- Depreciable personal property with an adjusted basis of $10,000.- Other depreciable property with an adjusted basis of $15,000.You would reduce the basis as follows:1. Reduce the basis of the depreciable real property by $30,000 (to zero).2. Reduce the basis of the depreciable personal property by $10,000 (to zero).3. Reduce the basis of the other depreciable property by $10,000 (remaining $50,000 - $30,000 - $10,000).### Important Considerations:- Ensure that the basis reduction does not reduce the basis of any property below zero.- The election to reduce the basis of depreciable property must be made on the original return for the year of debt forgiveness.- Consult IRS regulations and possibly a tax professional to ensure compliance with all rules and to optimize your tax situation.For more detailed information, refer to IRS publications and the specific sections of the Internal Revenue Code (IRC) mentioned in the provided document.

April 25, 2024

The 2025 Fiscal Year Budget, as outlined in the provided excerpts, focuses on several key areas to support and advance the United States' domestic and international priorities. Here's a summary of the main points covered:

1. Defense and Pacific Deterrence: The budget emphasizes strengthening deterrence in the Indo-Pacific region through the Department of Defense’s 2025 Pacific Deterrence Initiative. It aims to ensure the readiness of America's armed forces, invest in the submarine industrial base, and support the AUKUS agreement, particularly in aiding Australia to acquire nuclear-powered submarines.

2. Humanitarian Assistance and Global Food Security: It allocates $10.3 billion for humanitarian and refugee assistance to support millions of people worldwide. An additional $10 billion is requested to address global humanitarian needs, including the situation in Gaza.

3. Climate Leadership and International Finance: The budget doubles down on America's global climate leadership, aiming to fulfill the President's $11 billion commitment for international climate finance and includes a $3 billion contribution to the Green Climate Fund.

4. Domestic Investments in Families: Key domestic initiatives include supporting nutrition safety nets with $8.5 billion, funding universal pre-K and Head Start to enhance early childhood education, and expanding opportunities and equity through various programs.

5. Homelessness and Veterans' Health: It provides $4.1 billion for Homeless Assistance Grants and prioritizes veterans' mental health services and suicide prevention with significant investments in healthcare and benefits for veterans exposed to environmental hazards.

6. Workforce and Economic Preparation: The budget continues the implementation of the President's Investing in America Agenda, with substantial funding for infrastructure, transportation, and the introduction of a comprehensive paid family and medical leave program, alongside a call for mandatory paid sick days for all workers.

This budget reflects a comprehensive approach to addressing both immediate and long-term challenges, with a strong focus on defense, humanitarian aid, climate change, family support, veterans' health, and economic resilience.

April 22, 2024

Yes, members of the military can receive automatic extensions to file their taxes under certain conditions. Here are the key points based on the provided context:

1. Members Serving in Combat Zones or Qualified Hazardous Duty Areas: The deadline for filing tax returns, paying any taxes owed, and filing a claim for a refund is automatically extended for individuals serving in a combat zone or a qualified hazardous duty area. This extension applies not only to members of the Armed Forces but also to merchant marines serving aboard vessels under the operational control of the Department of Defense, Red Cross personnel, accredited correspondents, and civilians under the direction of the Armed Forces in support of the Armed Forces. The extension period begins after the later of the last day in the combat zone or the last day the area qualifies as a combat zone, plus an additional 180 days after the last day of any continuous qualified hospitalization for injury from service in the combat zone.

2. Individuals Outside the United States: U.S. citizens or residents who are living outside the United States and Puerto Rico and whose main place of business or post of duty is outside the United States and Puerto Rico, including those in military or naval service on duty outside the United States and Puerto Rico, are allowed an automatic 2-month extension to file their return and pay any federal income tax due without needing to file Form 4868. This extension is until June 15 for those who use the calendar year for tax purposes. If more time is needed beyond the automatic 2-month extension, individuals may request an additional 4-month extension by filing Form 4868, for a total of 6 months.

3. Specific State Extensions: Some states, like Kentucky, honor federal income tax extensions for their state income tax filings. For example, members of the Army, Navy, Marines, Air Force, or Public Health Service serving in a combat zone are not required to file a state income tax return and pay taxes that would otherwise become due during their period of service until 12 months after the service is completed. This extension also applies to members of the National Guard or any branch of the Reserves called to active duty to serve in a combat zone.

These provisions ensure that military personnel who are serving, especially those in combat zones or stationed outside the U.S., have additional time to meet their tax obligations without penalty.