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State Nm Us Tax

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State Nm Us Tax

State nm us tax 17. State nm us tax   How To Get Tax Help Table of Contents Go online, use a smart phone, call or walk in to an office near you. State nm us tax Whether it's help with a tax issue, preparing your tax return or picking up a free publication or form, get the help you need the way you want it. State nm us tax Free help with your tax return. State nm us tax   Free help in preparing your return is available nationwide from IRS-certified volunteers. State nm us tax The Volunteer Income Tax Assistance (VITA) program is designed to help low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers. State nm us tax The Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. State nm us tax Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. State nm us tax Some VITA and TCE sites provide taxpayers the opportunity to prepare their return with the assistance of an IRS-certified volunteer. State nm us tax To find the nearest VITA or TCE site, visit IRS. State nm us tax gov or call 1-800-906-9887. State nm us tax   As part of the TCE program, AARP offers the Tax-Aide counseling program. State nm us tax To find the nearest AARP Tax-Aide site, visit AARP's website at www. State nm us tax aarp. State nm us tax org/money/taxaide or call 1-888-227-7669. State nm us tax   For more information on these programs, go to IRS. State nm us tax gov and enter “VITA” in the search box. State nm us tax Internet. State nm us tax IRS. State nm us tax gov and IRS2Go are ready when you are — every day, every night, 24 hours a day, 7 days a week. State nm us tax Apply for an Employer Identification Number (EIN). State nm us tax Go to IRS. State nm us tax gov and enter Apply for an EIN in the search box. State nm us tax Request an Electronic Filing PIN by going to IRS. State nm us tax gov and entering Electronic Filing PIN in the search box. State nm us tax Download forms, instructions, and publications, including some accessible versions. State nm us tax Order free transcripts of your tax returns or tax account using the Order a Transcript tool on IRS. State nm us tax gov or IRS2Go. State nm us tax Tax return and tax account transcripts are generally available for the current year and past three years. State nm us tax Locate the nearest Taxpayer Assistance Center using the Office Locator tool on IRS. State nm us tax gov or IRS2Go. State nm us tax Stop by most business days for face-to-face tax help, no appointment necessary — just walk in. State nm us tax An employee can explain IRS letters, request adjustments to your tax account or help you set up a payment plan. State nm us tax Before you visit, check the Office Locator for the address, phone number, hours of operation and the services provided. State nm us tax If you have an ongoing tax account problem or a special need, such as a disability, you can request an appointment. State nm us tax Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. State nm us tax Locate the nearest volunteer help site with the VITA Locator Tool on IRS. State nm us tax gov. State nm us tax Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. State nm us tax The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. State nm us tax Most VITA and TCE sites offer free electronic filing and some provide IRS-certified volunteers who can help prepare your tax return. State nm us tax AARP offers the Tax-Aide counseling program as part of the TCE program. State nm us tax Visit AARP's website to find the nearest Tax-Aide location. State nm us tax Research your tax questions. State nm us tax Search publications and instructions by topic or keyword. State nm us tax Read the Internal Revenue Code, regulations, or other official guidance. State nm us tax Read Internal Revenue Bulletins. State nm us tax Sign up to receive local and national tax news by email. State nm us tax Phone. State nm us tax You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. State nm us tax   Call the Business and Specialty Tax line for questions at 1-800-829-4933. State nm us tax Download the free IRS2Go mobile app from the iTunes app store or from Google Play. State nm us tax Use it to watch the IRS YouTube channel, get IRS news as soon as it's released to the public, order transcripts of your tax returns or tax account, check your refund status, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. State nm us tax Call to locate the nearest volunteer help site, 1-800-906-9887. State nm us tax Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. State nm us tax The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. State nm us tax Most VITA and TCE sites offer free electronic filing. State nm us tax Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. State nm us tax Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. State nm us tax Call to order forms, instructions and publications, 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions and publications, and prior-year forms and instructions (limited to 5 years). State nm us tax You should receive your order within 10 business days. State nm us tax Call to order transcripts of your tax returns or tax account, 1-800-908-9946. State nm us tax Follow the prompts to provide your Employer Identification Number, street address and ZIP code. State nm us tax Call for TeleTax topics, 1-800-829-4477, to listen to pre-recorded messages covering various tax topics. State nm us tax Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. State nm us tax The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. State nm us tax These individuals can also contact the IRS through relay services such as the Federal Relay Service available at www. State nm us tax gsa. State nm us tax gov/fedrelay. State nm us tax Walk-in. State nm us tax You can find a selection of forms, publications and services — in-person, face-to-face. State nm us tax   Products. State nm us tax You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. State nm us tax Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. State nm us tax Services. State nm us tax You can walk in to your local TAC most business days for personal, face-to-face tax help. State nm us tax An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. State nm us tax If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local TAC where you can talk with an IRS representative face-to-face. State nm us tax No appointment is necessary—just walk in. State nm us tax Before visiting, check www. State nm us tax irs. State nm us tax gov/localcontacts for hours of operation and services provided. State nm us tax Mail. State nm us tax You can send your order for forms, instructions, and publications to the address below. State nm us tax You should receive a response within 10 days after your request is received. State nm us tax  Internal Revenue Service 1201 N. State nm us tax Mitsubishi Motorway Bloomington, IL 61705-6613 The Taxpayer Advocate Service Is Here to Help You. State nm us tax   The Taxpayer Advocate Service (TAS) is your voice at the IRS. State nm us tax Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. State nm us tax What can TAS do for you?   We can offer you free help with IRS problems that you can't resolve on your own. State nm us tax We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. State nm us tax You face (or your business is facing) an immediate threat of adverse action. State nm us tax You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. State nm us tax   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. State nm us tax Here's why we can help: TAS is an independent organization within the IRS. State nm us tax Our advocates know how to work with the IRS. State nm us tax Our services are free and tailored to meet your needs. State nm us tax We have offices in every state, the District of Columbia, and Puerto Rico. State nm us tax How can you reach us?   If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. State nm us tax irs. State nm us tax gov/advocate, or call us toll-free at 1-877-777-4778. State nm us tax How else does TAS help taxpayers?   TAS also works to resolve large-scale, systemic problems that affect many taxpayers. State nm us tax If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. State nm us tax irs. State nm us tax gov/sams. State nm us tax Low Income Taxpayer Clinics. State nm us tax   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. State nm us tax Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. State nm us tax Visit www. State nm us tax TaxpayerAdvocate. State nm us tax irs. State nm us tax gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. State nm us tax Small Business and Self-Employed Tax Center. State nm us tax This online guide is a must for every small business owner or any taxpayer about to start a business. State nm us tax  The information is updated during the year. State nm us tax Visit www. State nm us tax irs. State nm us tax gov/Businesses/Small-Businesses-&-Self-Employed. State nm us tax Prev  Up  Next   Home   More Online Publications
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The State Nm Us Tax

State nm us tax 2. State nm us tax   Possession Source Income Table of Contents Types of IncomeCompensation for Labor or Personal Services Investment Income Sales or Other Dispositions of Property Scholarships, Fellowships, Grants, Prizes, and Awards Effectively Connected Income In order to determine where to file your return and which form(s) you need to complete, you must determine the source of each item of income you received during the tax year. State nm us tax Income you received from sources within, or that was effectively connected with the conduct of a trade or business within, the relevant possession must be identified separately from U. State nm us tax S. State nm us tax or foreign source income. State nm us tax This chapter discusses the rules for determining if the source of your income is from: American Samoa, The Commonwealth of the Northern Mariana Islands (CNMI), The Commonwealth of Puerto Rico (Puerto Rico), Guam, or The U. State nm us tax S. State nm us tax Virgin Islands (USVI). State nm us tax Generally, the same rules that apply for determining U. State nm us tax S. State nm us tax source income also apply for determining possession source income. State nm us tax However, there are some important exceptions to these rules. State nm us tax Both the general rules and the exceptions are discussed in this chapter. State nm us tax U. State nm us tax S. State nm us tax income rule. State nm us tax   This rule states that income is not possession source income if, under the rules of Internal Revenue Code sections 861–865, it is treated as income: From sources within the United States, or Effectively connected with the conduct of a trade or business within the United States. State nm us tax Table 2-1 shows the general rules for determining whether income is from sources within the United States. State nm us tax Table 2-1. State nm us tax General Rules for Determining U. State nm us tax S. State nm us tax Source of Income Item of Income Factor Determining Source Salaries, wages, and other compensation for labor or personal services Where labor or services performed Pensions Contributions: Where services were performed that earned the pension Investment earnings: Where pension trust is located Interest Residence of payer Dividends Where corporation created or organized Rents Location of property Royalties:   Natural resources Location of property Patents, copyrights, etc. State nm us tax Where property is used Sale of business inventory—purchased Where sold Sale of business inventory—produced Allocation if produced and sold in different locations Sale of real property Location of property Sale of personal property Seller's tax home (but see Special Rules for Gains From Dispositions of Certain Property , later, for exceptions) Sale of natural resources Allocation based on fair market value of product at export terminal. State nm us tax For more information, see Regulations section 1. State nm us tax 863-1(b). State nm us tax Types of Income This section looks at the most common types of income received by individuals, and the rules for determining the source of the income. State nm us tax Generally, the same rules shown in Table 2-1 are used to determine if you have possession source income. State nm us tax Compensation for Labor or Personal Services Income from labor or personal services includes wages, salaries, commissions, fees, per diem allowances, employee allowances and bonuses, and fringe benefits. State nm us tax It also includes income earned by sole proprietors and general partners from providing personal services in the course of their trade or business. State nm us tax Services performed wholly within a relevant possession. State nm us tax   Generally, all pay you receive for services performed in a relevant possession is considered to be from sources within that possession. State nm us tax However, there is an exception for income earned as a member of the U. State nm us tax S. State nm us tax Armed Forces or a civilian spouse. State nm us tax U. State nm us tax S. State nm us tax Armed Forces. State nm us tax   If you are a bona fide resident of a relevant possession, your military service pay will be sourced in that possession even if you perform the services in the United States or another possession. State nm us tax However, if you are not a bona fide resident of a possession, your military service pay will be income from the  United States even if you perform services in a possession. State nm us tax Civilian spouse of active duty member of the U. State nm us tax S. State nm us tax Armed Forces. State nm us tax   If you are a bona fide resident of a U. State nm us tax S. State nm us tax possession and choose to keep that possession as your tax residence under MSRRA when relocating with your servicemember spouse under military orders, the source of income for your labor or personal services is considered to be that possession. State nm us tax Likewise, if your tax residence is in one of the 50 states or the District of Columbia before relocating and you choose to keep it as your tax residence, the source of income for services performed in any of the U. State nm us tax S. State nm us tax possessions is considered to be the United States and, specifically, your state of residence or the District of Columbia. State nm us tax Services performed partly inside and partly outside a relevant possession. State nm us tax   If you are an employee and receive compensation for labor or personal services performed both inside and outside the relevant possession, special rules apply in determining the source of the compensation. State nm us tax Compensation (other than certain fringe benefits) is sourced on a time basis. State nm us tax Certain fringe benefits (such as housing and education) are sourced on a geographical basis. State nm us tax   Or, you may be permitted to use an alternative basis to determine the source of compensation. State nm us tax See Alternative basis , later. State nm us tax   If you are self-employed, determine the source of your income for labor or personal services from self-employment on the basis that most correctly reflects the proper source of that income under the facts and circumstances of your particular case. State nm us tax In many cases, the facts and circumstances will call for an apportionment on a time basis as explained next. State nm us tax Time basis. State nm us tax   Use a time basis to figure your compensation for labor or personal services from the relevant possession (other than the fringe benefits discussed later). State nm us tax Do this by multiplying your total compensation (other than the fringe benefits discussed later) by the following fraction:   Number of days you performed  services in the relevant  possession during the year     Total number of days you  performed services during the year           You can use a unit of time less than a day in the above fraction, if appropriate. State nm us tax The time period for which the income is made does not have to be a year. State nm us tax Instead, you can use another distinct, separate, and continuous time period if you can establish to the satisfaction of the IRS that this other period is more appropriate. State nm us tax Example. State nm us tax In 2013, you worked in your employer's office in the United States for 60 days and in the Puerto Rico office for 180 days, earning a total of $80,000 for the year. State nm us tax Your Puerto Rico source income is $60,000, figured as follows. State nm us tax       180 days 240 days × $80,000 = $60,000                 Multi-year compensation. State nm us tax   The source of multi-year compensation is generally determined on a time basis over the period to which the compensation is attributable. State nm us tax Multi-year compensation is compensation that is included in your income in 1 tax year but is attributable to a period that includes 2 or more tax years. State nm us tax You determine the period to which the income is attributable based on the facts and circumstances of your case. State nm us tax For more information on multi-year compensation, see Treasury Decision (T. State nm us tax D. State nm us tax ) 9212 and Regulations section 1. State nm us tax 861-4, 2005-35 I. State nm us tax R. State nm us tax B. State nm us tax 429, available at www. State nm us tax irs. State nm us tax gov/irb/2005-35_IRB/ar14. State nm us tax html. State nm us tax Certain fringe benefits sourced on a geographical basis. State nm us tax   If you received any of the following fringe benefits as compensation for labor or services performed as an employee partly inside and partly outside a relevant possession, you must source that income on a geographical basis. State nm us tax Housing. State nm us tax Education. State nm us tax Local transportation. State nm us tax Tax reimbursement. State nm us tax Hazardous or hardship duty pay. State nm us tax Moving expense reimbursement. State nm us tax For information on determining the source of the fringe benefits listed above, see Regulations section 1. State nm us tax 861-4. State nm us tax Alternative basis. State nm us tax   You can determine the source of your compensation under an alternative basis if you establish to the satisfaction of the IRS that, under the facts and circumstances of your case, the alternative basis more properly determines the source of your income than the time or geographical basis. State nm us tax If you use an alternative basis, you must keep (and have available for inspection) records to document why the alternative basis more properly determines the source of your income. State nm us tax De minimis exception. State nm us tax   There is an exception to the rule for determining the source of income earned in a possession. State nm us tax Generally, you will not have income from a possession if during a tax year you: Are a U. State nm us tax S. State nm us tax citizen or resident, Are not a bona fide resident of that possession, Are not employed by or under contract with an individual, partnership, or corporation that is engaged in a trade or business in that possession, Temporarily perform services in that possession for 90 days or less, and Earned $3,000 or less from such services. State nm us tax This exception began with income earned during your 2008 tax year. State nm us tax Pensions. State nm us tax   Generally, pension income has two components: contributions to the pension plan and the earnings accrued from investing those contributions. State nm us tax The contribution portion is sourced according to where services were performed that earned the pension. State nm us tax The investment earnings portion is sourced according to the location of the pension trust. State nm us tax Example. State nm us tax You are a U. State nm us tax S. State nm us tax citizen who worked in Puerto Rico for a U. State nm us tax S. State nm us tax company. State nm us tax All services were performed in Puerto Rico. State nm us tax Upon retirement you remained in Puerto Rico and began receiving your pension from the U. State nm us tax S. State nm us tax pension trust of your employer. State nm us tax Distributions from the U. State nm us tax S. State nm us tax pension trust must be allocated between (1) contributions, which are Puerto Rico source income, and (2) investment earnings, which are U. State nm us tax S. State nm us tax source income. State nm us tax Investment Income This category includes such income as interest, dividends, rents, and royalties. State nm us tax Interest income. State nm us tax   The source of interest income is generally determined by the residence of the payer. State nm us tax Interest paid by corporations created or organized in a relevant possession (possession corporation) or by individuals who are bona fide residents of a relevant possession is considered income from sources within that possession. State nm us tax   However, there is an exception to this rule if you are a bona fide resident of a relevant possession, receive interest from a corporation created or organized in that possession, and are a shareholder of that corporation who owns, directly or indirectly, at least 10% of the total voting stock of the corporation. State nm us tax See Regulations section 1. State nm us tax 937-2(i) for more information. State nm us tax Dividends. State nm us tax   Generally, dividends paid by a corporation created or organized in a relevant possession will be considered income from sources within that possession. State nm us tax There are additional rules for bona fide residents of a relevant possession who receive dividend income from possession corporations, and who own, directly or indirectly, at least 10% of the voting stock of the corporation. State nm us tax For more information, see Regulations section 1. State nm us tax 937-2(g). State nm us tax Rental income. State nm us tax   Rents from property located in a relevant possession are treated as income from sources within that possession. State nm us tax Royalties. State nm us tax   Royalties from natural resources located in a relevant possession are considered income from sources within that possession. State nm us tax   Also considered possession source income are royalties received for the use of, or for the privilege of using, in a relevant possession, patents, copyrights, secret processes and formulas, goodwill, trademarks, trade brands, franchises, and other like property. State nm us tax Sales or Other Dispositions of Property The source rules for sales or other dispositions of property are varied. State nm us tax The most common situations are discussed below. State nm us tax Real property. State nm us tax   Real property includes land and buildings, and generally anything built on, growing on, or attached to land. State nm us tax The location of the property generally determines the source of income from the sale. State nm us tax For example, if you are a bona fide resident of Guam and sell your home that is located in Guam, the gain on the sale is sourced in Guam. State nm us tax If, however, the home you sold was located in the United States, the gain is U. State nm us tax S. State nm us tax source income. State nm us tax Personal property. State nm us tax   The term “personal property” refers to property (such as machinery, equipment, or furniture) that is not real property. State nm us tax Generally, gain (or loss) from the sale or other disposition is sourced according to the seller's tax home. State nm us tax If personal property is sold by a bona fide resident of a relevant possession, the gain (or loss) from the sale is treated as sourced within that possession. State nm us tax   This rule does not apply to the sale of inventory, intangible property, depreciable personal property, or property sold through a foreign office or fixed place of business. State nm us tax The rules applying to sales of inventory are discussed below. State nm us tax For information on sales of the other types of property mentioned, see Internal Revenue Code section 865. State nm us tax Inventory. State nm us tax   Your inventory is personal property that is stock in trade or that is held primarily for sale to customers in the ordinary course of your trade or business. State nm us tax The source of income from the sale of inventory depends on whether the inventory was purchased or produced. State nm us tax Purchased. State nm us tax   Income from the sale of inventory that you purchased is sourced where you sell the property. State nm us tax Generally, this is where title to the property passes to the buyer. State nm us tax Produced. State nm us tax   Income from the sale of inventory that you produced in a relevant possession and sold outside that possession (or vice versa) is sourced based on an allocation. State nm us tax For information on making the allocation, see Regulations section 1. State nm us tax 863-3(f). State nm us tax Special Rules for Gains From Dispositions of Certain Property There are special rules for gains from dispositions of certain investment property (for example, stocks, bonds, debt instruments, diamonds, and gold) owned by a U. State nm us tax S. State nm us tax citizen or resident alien prior to becoming a bona fide resident of a possession. State nm us tax You are subject to these special rules if you meet both of the following conditions. State nm us tax For the tax year for which the source of the gain must be determined, you are a bona fide resident of the relevant possession. State nm us tax For any of the 10 years preceding that year, you were a citizen or resident alien of the United States (other than a bona fide resident of the relevant possession). State nm us tax If you meet these conditions, gains from the disposition of this property will not be treated as income from sources within the relevant possession for purposes of the Internal Revenue Code. State nm us tax Accordingly, bona fide residents of American Samoa and Puerto Rico, for example, may not exclude the gain on their U. State nm us tax S. State nm us tax tax return. State nm us tax (See chapter 3 for additional filing information. State nm us tax ) With respect to the CNMI, Guam, and the USVI, the gain from the disposition of this property will not meet the requirements for certain tax rules that may allow bona fide residents of those possessions to reduce or obtain a rebate of taxes on income from sources within the relevant possessions. State nm us tax These rules apply to dispositions after April 11, 2005. State nm us tax For details, see Regulations section 1. State nm us tax 937-2(f)(1) and Examples 1 and 2 of section 1. State nm us tax 937-2(k). State nm us tax Example 1. State nm us tax In 2007, Cheryl Jones, a U. State nm us tax S. State nm us tax citizen, lived in the United States and paid $1,000 for 100 shares of stock in the Rose Corporation, a U. State nm us tax S. State nm us tax corporation listed on the New York Stock Exchange. State nm us tax On March 1, 2010, she moved to Puerto Rico and changed her tax home to Puerto Rico on the same date. State nm us tax Cheryl satisfied the presence test in 2010 and, under the year-of-move exception, she was considered a bona fide resident of Puerto Rico for the rest of 2010. State nm us tax On March 1, 2010, the closing value of Cheryl's stock in the Rose Corporation was $2,000. State nm us tax On January 5, 2013, while still a bona fide resident of Puerto Rico, Cheryl sold all her Rose Corporation stock for $7,000. State nm us tax Under the earlier rules, none of Cheryl's $6,000 gain will be treated as income from sources within Puerto Rico. State nm us tax The source rules discussed in the preceding paragraphs supplement, and may apply in conjunction with, an existing special rule. State nm us tax This existing special rule applies if you are a U. State nm us tax S. State nm us tax citizen or resident alien who becomes a bona fide resident of American Samoa, the CNMI, or Guam, and who has gain from the disposition of certain U. State nm us tax S. State nm us tax assets during the 10-year period beginning when you became a bona fide resident. State nm us tax The gain is U. State nm us tax S. State nm us tax source income that generally is subject to U. State nm us tax S. State nm us tax tax if the property is either (1) located in the United States; (2) stock issued by a U. State nm us tax S. State nm us tax corporation or a debt obligation of a U. State nm us tax S. State nm us tax person or of the United States, a state (or political subdivision), or the District of Columbia; or (3) property that has a basis in whole or in part by reference to property described in (1) or (2). State nm us tax See chapter 3 for filing information. State nm us tax Special election. State nm us tax   For dispositions after April 11, 2005, you can choose to treat the part of gain (or loss) attributable to the time you held the property while a bona fide resident of the relevant possession (the possession holding period) as gain (or loss) from sources within that possession. State nm us tax Make the election by reporting the gain attributable to the possession holding period on your income tax return for the year of disposition. State nm us tax This election overrides both of the special rules discussed earlier. State nm us tax   There are two methods for figuring the gain for the possession holding period, one for marketable securities and another for other types of investment property. State nm us tax Marketable securities. State nm us tax   Marketable securities are those actively traded on an established financial market, such as stock in a publicly held corporation. State nm us tax Under the special election, allocate the gain (or loss) by figuring the appreciation separately for your possession and U. State nm us tax S. State nm us tax holding periods. State nm us tax   Your possession holding period begins on the first day you do not have a tax home outside the relevant possession. State nm us tax The gain (or loss) attributable to the possession holding period is the difference in fair market value of the security at the close of the market on the first and last days of this holding period. State nm us tax This is your gain (or loss) that is treated as being from sources within the relevant possession. State nm us tax If you were a bona fide resident of the relevant possession for more than one continuous period, combine the gains (or losses) from each possession holding period. State nm us tax Example 2. State nm us tax Assume the same facts as in Example 1, except that Cheryl makes the special election to allocate the gain between her U. State nm us tax S. State nm us tax and possession holding periods. State nm us tax Cheryl's possession holding period began March 1, 2010, the date her tax home changed to Puerto Rico. State nm us tax Therefore, the portion of gain attributable to her possession holding period is $5,000 ($7,000 sale price – $2,000 closing value on first day of the possession holding period). State nm us tax By reporting $5,000 of her $6,000 gain as Puerto Rico source income on her 2013 Puerto Rico tax return (and the remainder as non-Puerto Rico source income), Cheryl elects to treat that amount as Puerto Rico source income. State nm us tax Other personal property. State nm us tax   For personal property other than marketable securities, use a time-based allocation. State nm us tax Figure the gain (or loss) attributable to the possession holding period by multiplying your total gain (or loss) by the following fraction. State nm us tax      Number of days in the  possession holding period     Total number of days  in your holding period         The result is your gain (or loss) that is treated as being from sources within the relevant possession. State nm us tax Example 3. State nm us tax In addition to the stock in Rose Corporation, Cheryl acquired a 5% interest in the Alder Partnership on January 1, 2009. State nm us tax On March 1, 2010, when she established bona fide residency in Puerto Rico, her partnership interest was not considered a marketable security. State nm us tax On September 16, 2013, while still a bona fide resident of Puerto Rico, Cheryl sold her interest in Alder Partnership for a $100,000 gain. State nm us tax She had owned the interest for a total of 1,720 days. State nm us tax Cheryl's possession holding period (from March 1, 2010, through September 16, 2013) is 1,296 days. State nm us tax The portion of her gain attributable to Puerto Rico is $75,349 ($100,000 x (1,296 Puerto Rico days ÷ 1,720 total days)). State nm us tax By reporting $75,349 of her $100,000 gain as Puerto Rico source income on her 2013 Puerto Rico tax return (and the remainder as non-Puerto Rico source income), Cheryl elects to treat that amount as Puerto Rico source income. State nm us tax Scholarships, Fellowships, Grants, Prizes, and Awards The source of these types of income is generally the residence of the payer, regardless of who actually disburses the funds. State nm us tax Therefore, in order to be possession source income, the payer must be a resident of the relevant possession, such as an individual who is a bona fide resident or a corporation created or organized in that possession. State nm us tax These rules do not apply to amounts paid as salary or other compensation for services. State nm us tax See Compensation for Labor or Personal Services, earlier in this chapter, for the source rules that apply. State nm us tax Effectively Connected Income In limited circumstances, some kinds of income from sources outside the relevant possession must be treated as effectively connected with a trade or business in that possession. State nm us tax These circumstances are listed below. State nm us tax You have an office or other fixed place of business in the relevant possession to which the income can be attributed. State nm us tax That office or place of business is a material factor in producing the income. State nm us tax The income is produced in the ordinary course of the trade or business carried on through that office or other fixed place of business. State nm us tax An office or other fixed place of business is a material factor if it significantly contributes to, and is an essential economic element in, the earning of the income. State nm us tax The three kinds of income from sources outside the relevant possession to which these rules apply are the following. State nm us tax Rents and royalties for the use of, or for the privilege of using, intangible personal property located outside the relevant possession or from any interest in such property. State nm us tax Included are rents or royalties for the use of, or for the privilege of using, outside the relevant possession, patents, copyrights, secret processes and formulas, goodwill, trademarks, trade brands, franchises, and similar properties if the rents or royalties are from the active conduct of a trade or business in the relevant possession. State nm us tax Dividends or interest from the active conduct of a banking, financing, or similar business in the relevant possession. State nm us tax Income, gain, or loss from the sale or exchange outside the relevant possession, through the office or other fixed place of business in the relevant possession, of: Stock in trade, Property that would 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. State nm us tax Item (3) will not apply if you sold the property for use, consumption, or disposition outside the relevant possession and an office or other fixed place of business in a foreign country was a material factor in the sale. State nm us tax Example. State nm us tax Marcy Jackson is a bona fide resident of American Samoa. State nm us tax Her business, which she conducts from an office in American Samoa, is developing and selling specialized computer software. State nm us tax A software purchaser will frequently pay Marcy an additional amount to install the software on the purchaser's operating system and to ensure that the software is functioning properly. State nm us tax Marcy installs the software at the purchaser's place of business, which may be in American Samoa, in the United States, or in another country. State nm us tax The income from selling the software is effectively connected with the conduct of Marcy's business in American Samoa, even though the product's destination may be outside the possession. State nm us tax However, the compensation she receives for installing the software (personal services) outside of American Samoa is not effectively connected with the conduct of her business in the possession—the income is sourced where she performs the services. State nm us tax Prev  Up  Next   Home   More Online Publications