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How to prepare Form Instruction 1040 Line 51

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FAQ - Form Instruction 1040 Line 51

What is the purpose of Form Instruction 1040 Line 51?
A. The purpose of Form instruction 1040 lines 51 through 73 is to explain, with respect to the federal income taxes for income years beginning after May 1, 1974, that the taxpayer's net income for such year is exempt from taxation because, under section 6721, such income will be exempt from taxation. (Tax Bulletin 2001-1 (May 2001)); Q. Does Form 1040 contain section 6721(a) in its instructions as Section 6721(a) was eliminated as of the 1986 Tax Reform Act of 1986 (P.L. 99-514)? A. No, Form 1040 does not contain section 6721(a). The instructions on Form 1040 explain the effect of the 1986 tax law on taxpayers' net income. Since the tax law's effects affect only net income, they are not incorporated into Form 1040. Accordingly, even if the 1986 tax law had not been repealed as of May 1, 1986, the form still would not have contained a section 6721(a) statement (see also question 7). Although IRS Publication 17, Revenue Procedure 2003-22, discusses the effect of section 1202 of the Internal Revenue Code on section 6721, no effect is intended by this publication for the 1986 tax law's effect on section 6721. Q. Does Form 1040 contain § 1.673-9, or what does it state as Section 1.673-9? A. No, Form 1040 does not contain § 1.673-9. The instructions under Section 1040 on the second page of the form include the following statement under the heading “Miscellaneous” (emphasis added): “The following rules apply to the use of this line in Section 1.673-9: The line can be completed only once for a taxpayer's entire return or part of the return. If an election is made for the filing of a joint return and a new return is required by section 1.652, 1.653, or 1.656 due to tax changes, the line and the applicable information on the second page of the return for this taxpayer cannot simply be corrected as long as the election remains in effect. “Miscellaneous” is a heading for instructions for a line contained on a Form 1040.” For a discussion of the meaning and use of the statement contained on Form 1040, see Publication 1040, line 50, Explanation of Benefits. Q.
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