Table of Contents
The following definitions are used throughout this publication.
The following paragraphs explain changes to casualty and theft losses that occurred in the Kansas disaster area.
Generally, an involuntary conversion occurs when property is damaged, destroyed, stolen, seized, requisitioned, or condemned, and you receive other property or money in payment, such as insurance or a condemnation award. Generally, you do not have to report a gain (if any) if you replace the property within 2 years (4 years for a main home in a Presidentially declared disaster area). However, for property that was involuntarily converted after May 3, 2007, as a result of the storms and tornadoes, a 5-year replacement period applies if substantially all of the use of the replacement property is in the Kansas disaster area. For more information, see the Instructions for Form 4684.
-
The excess of the NOL for the year over the specified liability loss for the year to which a 10-year carryback applies, or
-
The total of the following deductions (to the extent they are taken into account in computing the NOL for the tax year):
-
Qualified recovery assistance casualty loss (as defined below),
-
Moving expenses paid or incurred after May 3, 2007, and before January 1, 2010, for the employment of an individual whose main home was in the Kansas disaster area before May 4, 2007, who was unable to remain in that home because of the storms and tornadoes, and whose main job location (after the move) is in the Kansas disaster area,
-
Temporary housing expenses paid or incurred after May 3, 2007, and before January 1, 2010, to house employees of the taxpayer whose main job location is in the Kansas disaster area,
-
Depreciation or amortization allowable for any qualified recovery assistance property (even if you elected not to claim the special recovery assistance depreciation allowance for such property) for the year placed in service, and
-
Repair expenses (including expenses for the removal of debris) paid or incurred after May 3, 2007, and before January 1, 2010, for any damage from the storms and tornadoes to property located in the Kansas disaster area.
-
New rules provide for tax-favored withdrawals, repayments, and loans from certain retirement plans for individuals who suffered economic losses as a result of the storms and tornadoes.
-
The distribution was made after May 3, 2007, and before January 1, 2009.
-
Your main home was located in the Kansas disaster area on May 4, 2007.
-
You sustained an economic loss because of the storms and tornadoes. Examples of an economic loss include, but are not limited to:
-
Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause;
-
Loss related to displacement from your home; or
-
Loss of livelihood due to temporary or permanent layoffs.
-
-
A qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan).
-
A qualified annuity plan.
-
A tax-sheltered annuity contract.
-
A governmental section 457 deferred compensation plan.
-
A traditional, SEP, SIMPLE, or Roth IRA.
Qualified recovery assistance distributions are included in income in equal amounts over three years. However, if you elect, you can include the entire distribution in your income in the year it was received.
Qualified recovery assistance distributions are not subject to the additional 10% tax (or the additional 25% tax for certain distributions from SIMPLE IRAs) on early distributions from qualified retirement plans (including IRAs). However, any distributions you receive in excess of the $100,000 qualified recovery assistance distribution limit may be subject to the additional tax on early distributions.
For more information, see How To Report Qualified Recovery Assistance Distributions on page 4.
If you choose, you generally can repay any portion of a qualified recovery assistance distribution that is eligible for tax-free rollover treatment to an eligible retirement plan. Also, you can repay a qualified recovery assistance distribution made on account of a hardship from a retirement plan. However, see Exceptions below for qualified recovery assistance distributions you cannot repay.
You have three years from the day after the date you received the distribution to make a repayment. Amounts that are repaid are treated as a qualified rollover and are not included in income. Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. See Form 8915 for more information on how to report repayments.
-
Qualified recovery assistance distributions received as a beneficiary (other than a surviving spouse).
-
Required minimum distributions.
-
Periodic payments (other than from an IRA) that are for:
-
A period of 10 years or more,
-
Your life or life expectancy, or
-
The joint lives or joint life expectancies of you and your beneficiary.
-
If you received a distribution after May 3, 2007, from an eligible retirement plan, you may be able to designate it as a qualified recovery assistance distribution. See Qualified recovery assistance distribution on page 3.
If you have not filed your 2007 income tax return, see Form 8915 and Form 8606 on this page to see how to complete these forms for any qualified recovery assistance distributions. Be sure to attach Form 8915 and Form 8606 (if required) to your 2007 income tax return.
If you have filed your 2007 income tax return, you will need to amend your return to designate any distributions as qualified recovery assistance distributions. You can amend your 2007 income tax return by using Form 1040X. You will need to complete and attach Form 8915 and Form 8606 (if required) to your amended income tax return for any qualified recovery assistance distributions. See Form 8915 and Form 8606 on this page.
-
Cross out “Hurricane” in the title at the top of the form and enter “Recovery Assistance.” To the right of the title, cross out “2005” and enter “2007.”
-
In Part I, at the top of column (a), cross out “2005” and enter “2007.”
-
In Part II, cross out “Hurricane” in the title and enter “Recovery Assistance.” On lines 10 and 11, cross out “2005” and enter “2007.”
-
In Part III, cross out “Hurricane” in the title and enter “Recovery Assistance.” On line 12, cross out “hurricane” and enter “recovery assistance.” On lines 13 and 14, cross out “line 15b” and “line 25b.” On lines 18 and 19, cross out “2005” and enter “2007.”
-
On line 6, subtract any repayments of qualified recovery assistance distributions from the amount you would otherwise enter on line 6. Do not enter an amount less than -0-.
-
Include on line 7 the amount of any qualified recovery assistance distributions that you received even if they were later repaid.
-
Complete line 15 as follows.
-
If all of your distributions are qualified recovery assistance distributions, enter the amount from line 15 on Form 8915, line 13. Do not enter this amount on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b.
-
If you have qualified recovery assistance distributions as well as other distributions, you will need to multiply the amount on line 15 by a fraction. The numerator of the fraction is your total qualified recovery assistance distributions and the denominator is the amount from Form 8606, line 7. Enter the result in the white space in the bottom margin of the form under line 15. To the left of this amount, enter “Qualified recovery assistance distributions” and also enter this amount on Form 8915, line 13. Then, subtract this amount from the amount on line 15 and include the result on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. Also, enter this amount on Form 8606 under your qualified recovery assistance distributions. To the left of this amount, enter “Other distributions.”
-
-
Include on line 19 the amount of any qualified recovery assistance distributions that you received even if they were later repaid.
-
Complete line 25 as follows.
-
If all of your distributions are qualified recovery assistance distributions, enter the amount from line 25 on Form 8915, line 14. Do not enter this amount on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b.
-
If you have qualified recovery assistance distributions as well as other distributions, you will need to multiply the amount on line 25 by a fraction. The numerator of the fraction is your total qualified recovery assistance distributions and the denominator is the amount from Form 8606, line 21. Enter the result in the white space in the bottom margin of the form under line 25. To the left of this amount, enter “Qualified recovery assistance distributions” and also enter this amount on Form 8915, line 14. Then, subtract this amount from the amount on line 25 and include the result on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. Also, enter this amount on Form 8606 under your qualified recovery assistance distributions. To the left of this amount, enter “Other distributions.”
-
2005 Form 8915, page 1, Illustrated Example 1.
2005 Form 8915, page 2, Illustrated Example 1
Form 8606, page 1, Illustrated Example 1
If you received a distribution in 2008 from an eligible retirement plan, you may be able to designate it as a qualified recovery assistance distribution. See Qualified recovery assistance distribution on page 3. You will need to complete and attach Form 8915 and Form 8606 (if required) to your 2008 income tax return for any qualified recovery assistance distributions. See Form 8915 and Form 8606 below.
-
Cross out “Hurricane” in the title at the top of the form and enter “Recovery Assistance.” To the right of the title, cross out “2006” and enter “2008.”
-
In the first sentence of Part I and on line 1, cross out “hurricane” and enter “recovery assistance,” cross out “2006” and enter “2008,” and cross out “2005” and enter “2007.” At the top of column (a) cross out “2006” and enter “2008.”
-
In Part II, cross out “Hurricane” in the title and enter “Recovery Assistance.” On lines 12, 14, and 15, cross out “2005” and enter “2007.” On lines 17 and 19, cross out “2006” and enter “2008.”
-
In Part III, cross out “Hurricane” in the title and enter “Recovery Assistance.” On line 21, cross out “hurricane” and enter “recovery assistance.” On lines 22 and 23, cross out “line 15b” and “line 25b.” On lines 27, 29, and 30, cross out “2005” and enter “2007.” On lines 32 and 34, cross out “2006” and enter “2008.”
2006 Form 8915, page 1, Illustrated Example 2
2006 Form 8915, page 2, Illustrated Example 2
If you received a qualified distribution to purchase or construct a main home in the Kansas disaster area, you can repay part or all of that distribution after May 3, 2007, but no later than October 22, 2008, to an eligible retirement plan. For this purpose, an eligible retirement plan is any plan, annuity, or IRA to which a qualified rollover can be made.
To be a qualified distribution, the distribution must meet all of the following requirements.
-
The distribution is a hardship distribution from a 401(k) plan, a hardship distribution from a tax-sheltered annuity contract, or a qualified first-time homebuyer distribution from an IRA.
-
The distribution was received after November 4, 2006, and before May 5, 2007.
-
The distribution was to be used to purchase or construct a main home in the Kansas disaster area that was not purchased or constructed because of the storms and tornadoes.
Amounts that are repaid before October 23, 2008, are treated as a qualified rollover and are not included in income. Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover.
A qualified distribution not repaid before October 23, 2008, may be taxable for 2006 or 2007 and subject to the additional 10% tax (or the additional 25% tax for certain SIMPLE IRAs) on early distributions.
You must file Form 8915 if you received a qualified distribution that you repaid, in whole or in part, before October 23, 2008. See How to report, next, for information on completing Form 8915.
-
Cross out “Hurricane” in the title at the top of the form and enter “Recovery Assistance.” To the right of the title, cross out “2005” and enter “2006” or “2007.” Enter only the year the distribution was received.
-
Cross out “Hurricane” in the title of Part IV and enter “Kansas.”
-
In the sentence below the title of Part IV, cross out “March 1, 2006” and enter “October 23, 2008.”
-
On line 24, cross out “March 1, 2006” and enter “October 23, 2008.”
The following benefits are available to qualified individuals.
-
Increases to the limits for distributions treated as loans from employer plans.
-
A 1-year suspension for payments due on plan loans.
-
Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause;
-
Loss related to displacement from your home; or
-
Loss of livelihood due to temporary or permanent layoffs.
You can take a special depreciation allowance for qualified recovery assistance property (as defined below) you acquire after May 4, 2007. The special allowance is an additional deduction of 50% of the property's depreciable basis (after any section 179 deduction and before figuring your regular depreciation deduction). The special allowance applies only for the first year the property is placed in service.
The special allowance is deductible for both the regular tax and the alternative minimum tax (AMT). There is no AMT adjustment required for any depreciation figured on the remaining basis of the property.
You can elect not to deduct the special allowance for qualified recovery assistance property. If you make this election for any property, it applies to all property in the same class placed in service during the year.
-
Tangible property depreciated under the modified accelerated cost recovery system (MACRS) with a recovery period of 20 years or less.
-
Water utility property.
-
Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS.)
-
Qualified leasehold improvement property.
-
Nonresidential real property and residential rental property.
-
You must have acquired the property, by purchase, after May 4, 2007, but only if no binding written contract for the acquisition was in effect before
May 5, 2007. -
The property must be placed in service before 2009 (2010 in the case of nonresidential real property and residential rental property).
-
Substantially all of the use of the property must be in the Kansas disaster area and in the active conduct of your trade or business in the Kansas disaster area.
-
The original use of the property in the Kansas disaster area must begin with you after May 4, 2007. Used property can be qualified recovery assistance property if it has not previously been used within the Kansas disaster area. Also, additional capital expenditures you incurred after May 4, 2007, to recondition or rebuild your property meet the original use test if the original use of the property in the Kansas disaster area began with you.
-
Property required to be depreciated using the Alternative Depreciation System (ADS).
-
Property any portion of which is financed with the proceeds of a tax-exempt obligation under section 103.
-
Property for which you are claiming a commercial revitalization deduction.
-
Property in the same class as that for which you elected not to claim the special allowance for qualified recovery assistance property.
-
Property placed in service and disposed of in the same tax year.
-
Property converted from business use to personal use in the same tax year it is placed in service. Property converted from personal use to business use in the same or later tax year may be qualified recovery assistance property.
An increased section 179 deduction is allowable for qualified section 179 recovery assistance property (as defined later) placed in service in the Kansas disaster area.
-
$100,000, or
-
The cost of qualified section 179 recovery assistance property placed in service during the year (including such property placed in service by your spouse, even if you are filing a separate return).
-
$600,000, or
-
The cost of qualified section 179 recovery assistance property placed in service during the year.
An eligible employer who conducted an active trade or business in the Kansas disaster area can claim the employee retention credit. The credit is 40% of qualified wages for each eligible employee (up to a maximum of $6,000 in qualified wages per employee). Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). Use Form 5884-A to claim the credit. See Form 5884-A later. The following rules and definitions apply.
-
Employed an average of not more than 200 employees on business days during the tax year before May 4, 2007.
-
Conducted an active trade or business on May 4, 2007, in the Kansas disaster area.
-
Whose trade or business was inoperable on any day after May 4, 2007, and before January 1, 2008, because of damage caused by the storms and tornadoes.
-
Wages paid to your dependent or a related individual. See section 51(i)(1).
-
Wages paid to any employee during the period for which you received payment for the employee from a federally funded on-the-job training program.
-
Wages for services of replacement workers during a strike or lockout.
-
Cross out “Hurricane Katrina, Rita, or Wilma” in the title at the top of the form and enter “Kansas Storms and Tornadoes.”
-
On line 1a cross out “Hurricane Katrina” and enter “Kansas Storms and Tornadoes,” cross out “August 28, 2005,” and enter “May 4, 2007,” and cross out “January 1, 2006,” and enter “January 1, 2008.”
You can elect to deduct 50% of any qualified recovery assistance clean-up costs for the tax year in which the costs are paid or incurred, instead of capitalizing them. Qualified recovery assistance clean-up costs are any amounts paid or incurred after May 3, 2007, and before January 1, 2010, for the removal of debris from, or the demolition of structures on, real property located in the Kansas disaster area that is:
-
Held by you for use in a trade or business or for the production of income, or
-
Inventory or other property held primarily for sale to customers in the ordinary course of your trade or business.
You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. By selecting the method that is best for you, you will have quick and easy access to tax help.
-
E-file your return. Find out about commercial tax preparation and e-file services available free to eligible taxpayers.
-
Check the status of your refund. Click on Where's My Refund. Wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). Have your tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund.
-
Download forms, instructions, and publications.
-
Order IRS products online.
-
Research your tax questions online.
-
Search publications online by topic or keyword.
-
View Internal Revenue Bulletins (IRBs) published in the last few years.
-
Figure your withholding allowances using the withholding calculator online at www.irs.gov/individuals.
-
Determine if Form 6251 must be filed using our Alternative Minimum Tax (AMT) Assistant.
-
Sign up to receive local and national tax news by email.
-
Get information on starting and operating a small business.
-
Ordering forms, instructions, and publications. Call 1-800-829-3676 to order current-year forms, instructions, and publications, and prior-year forms and instructions. You should receive your order within 10 days.
-
Asking tax questions. Call the IRS with your tax questions at 1-800-829-1040.
-
Solving problems. You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Call your local Taxpayer Assistance Center for an appointment. To find the number, go to www.irs.gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service.
-
TTY/TDD equipment. If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications.
-
TeleTax topics. Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics.
-
Refund information. To check the status of your refund, call 1-800-829-4477 and press 1 for automated refund information or call 1-800-829-1954. Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). Have your tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund.
Evaluating the quality of our telephone services. To ensure IRS representatives give accurate, courteous, and professional answers, we
use several methods to evaluate the quality of our telephone services. One method is for a second IRS representative to listen
in on or record random
telephone calls. Another is to ask some callers to complete a short survey at the end of the call.
-
Products. You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes.
-
Services. You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you're more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. No appointment is necessary — just walk in. If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment may be requested. All other issues will be handled without an appointment. To find the number of your local office, go to www.irs.gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service.
Internal Revenue Service
1201 N. Mitsubishi Motorway
Bloomington, IL 61705-6613
-
Current-year forms, instructions, and publications.
-
Prior-year forms, instructions, and publications.
-
Bonus: Historical Tax Products DVD - Ships with the final release.
-
IRS Tax Map: an electronic research tool and finding aid.
-
Tax law frequently asked questions (FAQ).
-
Tax Topics from the IRS telephone response system.
-
Fill-in, print, and save features for most tax forms.
-
Internal Revenue Bulletins.
-
Toll-free and email technical support.
-
The CD/DVD is released twice during the year in January and March.
Purchase the CD/DVD from National Technical Information Service (NTIS) at www.irs.gov/cdorders for $35 (no handling fee) or call 1-877-CDFORMS (1-877-233-6767) toll free to buy the CD/DVD for $35 (plus a $5 handling fee). Price is subject to change.
-
Helpful information, such as how to prepare a business plan, find financing for your business, and much more.
-
All the business tax forms, instructions, and publications needed to successfully manage a business.
-
Tax law changes.
-
Tax Map: an electronic research tool and finding aid.
-
Web links to various government agencies, business associations, and IRS organizations.
-
“Rate the Product” survey—your opportunity to suggest changes for future editions.
-
A site map of the CD to help you navigate the pages of the CD with ease.
-
An interactive “Teens in Biz” module that gives practical tips for teens about starting their own business, creating a business plan, and filing taxes.
An updated version of this CD is available each year in early April. You can get a free copy by calling 1-800-829-3676 or by visiting www.irs.gov/smallbiz.
More Online Publications |