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previous page Previous Page: Publication 3920 - Tax Relief for Victims of Terrorist Acts - Estate Tax Reduction
next page Next Page: Publication 3920 - Tax Relief for Victims of Terrorist Acts - Illustrated Worksheets B and C
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taxmap/pubs/p3920-005.htm#TXMP47cfa25a

Structured Settlement Factoring Transactions


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Structured Settlement Factoring Transactions

A person who acquires payment rights in a structured settlement arrangement after February 21, 2002, may be subject to a 40% excise tax unless the transfer of the payment rights was approved in advance in a qualified order. The excise tax is figured on the excess of the undiscounted amount of the payments being acquired over the total amount actually paid to acquire them. However, this tax will not apply to transactions entered into from February 22, 2002, to July 1, 2002, if certain requirements are met. For information about these requirements, see Internal Revenue Code section 5891.
taxmap/pubs/p3920-005.htm#w32806e08
Pencil

Worksheet B Illustrated. Figuring the Tax To Be Forgiven

       (For Decedents Who Filed a Joint Return)

   (A)
First
Eligible Year (1994 or 2000)
(B)
Second
Eligible Year (1995 or 2001)
(C)
Third
Eligible Year (1996 or 2002)
1Enter the years eligible for forgiveness.120002001 
2Enter the decedent's taxable income. Figure taxable income as
if a separate return had been filed. See the instructions.
2$17,259$14,295 
3Enter the decedent's total tax. See the instructions. 36,1235,250 
4Enter the total, if any, of the decedent's taxes not eligible for forgiveness. See the instructions.43,5323,109 
5Subtract line 4 from line 3.52,5912,141 
6Enter the surviving spouse's taxable income. Figure taxable income as if a separate return had been filed. See the instructions for line 2. 629,02529,850 
7Enter the surviving spouse's total tax. See the instructions. 75,2775,391 
8Enter the total, if any, of the surviving spouse's taxes listed in
the instructions for line 4.
800 
9Subtract line 8 from line 7.95,2775,391 
10Add lines 5 and 9.107,8687,532 
11Enter the total tax from the joint return. See Table 1 on page 5 for the line number for years before 2002. 1110,7899,728 
12Add lines 4 and 8.123,5323,109 
13Subtract line 12 from line 11.137,2576,619 
14Divide line 5 by line 10. Enter the result as a decimal.14.329.284 
15Tax to be forgiven. Multiply line 13 by line 14 and enter the result. 15$2,388$1,880 
Note. If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C.
  • Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1.
  • If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. The IRS will determine the amount to be refunded.
previous pagePrevious Page: Publication 3920 - Tax Relief for Victims of Terrorist Acts - Estate Tax Reduction
next pageNext Page: Publication 3920 - Tax Relief for Victims of Terrorist Acts - Illustrated Worksheets B and C
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication