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Amend taxes online Publication 598 - Introductory Material Table of Contents What's New Introduction Useful Items - You may want to see: What's New Federal tax deposits must be made by electronic funds transfer. Amend taxes online Beginning January 1, 2011, you must use electronic funds transfer to make all federal tax deposits. Amend taxes online Forms 8109 and 8109-B, Federal Tax Deposit Coupon, cannot be used after 2010. Amend taxes online See Federal Tax Deposits Must be Made by Electronic Funds Transfer on page 3. Amend taxes online For large corporations, special rules apply for estimated tax payments that are required to be made for the period that includes July, August, or September of 2012, and the period that immediately follows these months. Amend taxes online See the instructions for line 12 on the 2012 Form 990-W (Worksheet), Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations. Amend taxes online The maximum cost of a low-cost article, for organizations eligible to receive charitable contributions, was increased to $9. Amend taxes online 70 for 2011. Amend taxes online See Distribution of low-cost articles on page 8. Amend taxes online The annual limit on associate member dues received by an agricultural or horticultural organization not treated as gross income was increased to $148 for 2011. Amend taxes online See Exception under Dues of Agricultural Organizations and Business Leagues on page 10. Amend taxes online The IRS has created a page on IRS. Amend taxes online gov that includes information about Pub. Amend taxes online 598 at www. Amend taxes online irs. Amend taxes online gov/pub598. Amend taxes online Introduction An exempt organization is not taxed on its income from an activity substantially related to the charitable, educational, or other purpose that is the basis for the organization's exemption. Amend taxes online Such income is exempt even if the activity is a trade or business. Amend taxes online However, if an exempt organization regularly carries on a trade or business not substantially related to its exempt purpose, except that it provides funds to carry out that purpose, the organization is subject to tax on its income from that unrelated trade or business. Amend taxes online This publication covers the rules for the tax on unrelated business income of exempt organizations. Amend taxes online It explains: Which organizations are subject to the tax (chapter 1), What the requirements are for filing a tax return (chapter 2), What an unrelated trade or business is (chapter 3), and How to figure unrelated business taxable income (chapter 4). Amend taxes online All section references in this publication are to the Internal Revenue Code. Amend taxes online Useful Items - You may want to see: Publication 557 Tax-Exempt Status for Your Organization Form (and Instructions) 990-T Exempt Organization Business Income Tax Return See chapter 5 for information about getting these publications and forms. Amend taxes online Comments and suggestions. Amend taxes online   We welcome your comments about this publication and your suggestions for future editions. Amend taxes online   You can write to us at: Internal Revenue Service Individual Forms and Publications Branch SE:W:CAR:MP:T:I 1111 Constitution Ave. Amend taxes online NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Amend taxes online Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Amend taxes online   You can email us at taxforms@irs. Amend taxes online gov. Amend taxes online Please put “publications Comment” on the subject line. Amend taxes online You can also send us comments from www. Amend taxes online irs. Amend taxes online gov/formspubs/, select “Comment on Tax Forms and Publications” under “Information about. Amend taxes online ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Amend taxes online Prev  Up  Next   Home   More Online Publications
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Amend taxes online 9. Amend taxes online   Rental Income and Expenses Table of Contents Introduction Useful Items - You may want to see: Rental Income Rental ExpensesVacant while listed for sale. Amend taxes online Repairs and Improvements Other Expenses Property Changed to Rental Use Renting Part of Property Not Rented for Profit Personal Use of Dwelling Unit (Including Vacation Home)Example. Amend taxes online Dividing Expenses Dwelling Unit Used as a Home Reporting Income and Deductions DepreciationChanging your accounting method to deduct unclaimed depreciation. Amend taxes online Limits on Rental LossesAt-Risk Rules Passive Activity Limits How To Report Rental Income and ExpensesSchedule E (Form 1040) Introduction This chapter discusses rental income and expenses. Amend taxes online It also covers the following topics. Amend taxes online Personal use of dwelling unit (including vacation home). Amend taxes online Depreciation. Amend taxes online Limits on rental losses. Amend taxes online How to report your rental income and expenses. Amend taxes online If you sell or otherwise dispose of your rental property, see Publication 544, Sales and Other Dispositions of Assets. Amend taxes online If you have a loss from damage to, or theft of, rental property, see Publication 547, Casualties, Disasters, and Thefts. Amend taxes online If you rent a condominium or a cooperative apartment, some special rules apply to you even though you receive the same tax treatment as other owners of rental property. Amend taxes online See Publication 527, Residential Rental Property, for more information. Amend taxes online Useful Items - You may want to see: Publication 527 Residential Rental Property 534 Depreciating Property Placed in Service Before 1987 535 Business Expenses 925 Passive Activity and At-Risk Rules 946 How To Depreciate Property Form (and Instructions) 4562 Depreciation and Amortization 6251 Alternative Minimum Tax—Individuals 8582 Passive Activity Loss Limitations Schedule E (Form 1040) Supplemental Income and Loss Rental Income In most cases, you must include in your gross income all amounts you receive as rent. Amend taxes online Rental income is any payment you receive for the use or occupation of property. Amend taxes online In addition to amounts you receive as normal rent payments, there are other amounts that may be rental income. Amend taxes online When to report. Amend taxes online   If you are a cash-basis taxpayer, you report rental income on your return for the year you actually or constructively receive it. Amend taxes online You are a cash-basis taxpayer if you report income in the year you receive it, regardless of when it was earned. Amend taxes online You constructively receive income when it is made available to you, for example, by being credited to your bank account. Amend taxes online   For more information about when you constructively receive income, see Accounting Methods in chapter 1. Amend taxes online Advance rent. Amend taxes online   Advance rent is any amount you receive before the period that it covers. Amend taxes online Include advance rent in your rental income in the year you receive it regardless of the period covered or the method of accounting you use. Amend taxes online Example. Amend taxes online You sign a 10-year lease to rent your property. Amend taxes online In the first year, you receive $5,000 for the first year's rent and $5,000 as rent for the last year of the lease. Amend taxes online You must include $10,000 in your income in the first year. Amend taxes online Canceling a lease. Amend taxes online   If your tenant pays you to cancel a lease, the amount you receive is rent. Amend taxes online Include the payment in your income in the year you receive it regardless of your method of accounting. Amend taxes online Expenses paid by tenant. Amend taxes online   If your tenant pays any of your expenses, the payments are rental income. Amend taxes online Because you must include this amount in income, you can deduct the expenses if they are deductible rental expenses. Amend taxes online See Rental Expenses , later, for more information. Amend taxes online Property or services. Amend taxes online   If you receive property or services, instead of money, as rent, include the fair market value of the property or services in your rental income. Amend taxes online   If the services are provided at an agreed upon or specified price, that price is the fair market value unless there is evidence to the contrary. Amend taxes online Security deposits. Amend taxes online   Do not include a security deposit in your income when you receive it if you plan to return it to your tenant at the end of the lease. Amend taxes online But if you keep part or all of the security deposit during any year because your tenant does not live up to the terms of the lease, include the amount you keep in your income in that year. Amend taxes online   If an amount called a security deposit is to be used as a final payment of rent, it is advance rent. Amend taxes online Include it in your income when you receive it. Amend taxes online Part interest. Amend taxes online   If you own a part interest in rental property, you must report your part of the rental income from the property. Amend taxes online Rental of property also used as your home. Amend taxes online   If you rent property that you also use as your home and you rent it less than 15 days during the tax year, do not include the rent you receive in your income and do not deduct rental expenses. Amend taxes online However, you can deduct on Schedule A (Form 1040) the interest, taxes, and casualty and theft losses that are allowed for nonrental property. Amend taxes online See Personal Use of Dwelling Unit (Including Vacation Home) , later. Amend taxes online Rental Expenses This part discusses expenses of renting property that you ordinarily can deduct from your rental income. Amend taxes online It includes information on the expenses you can deduct if you rent part of your property, or if you change your property to rental use. Amend taxes online Depreciation , which you can also deduct from your rental income, is discussed later. Amend taxes online Personal use of rental property. Amend taxes online   If you sometimes use your rental property for personal purposes, you must divide your expenses between rental and personal use. Amend taxes online Also, your rental expense deductions may be limited. Amend taxes online See Personal Use of Dwelling Unit (Including Vacation Home) , later. Amend taxes online Part interest. Amend taxes online   If you own a part interest in rental property, you can deduct expenses that you paid according to your percentage of ownership. Amend taxes online When to deduct. Amend taxes online   If you are a cash-basis taxpayer, you generally deduct your rental expenses in the year you pay them. Amend taxes online Depreciation. Amend taxes online   You can begin to depreciate rental property when it is ready and available for rent. Amend taxes online See Placed-in-Service under When Does Depreciation Begin and End in chapter 2 of Publication 527. Amend taxes online Pre-rental expenses. Amend taxes online   You can deduct your ordinary and necessary expenses for managing, conserving, or maintaining rental property from the time you make it available for rent. Amend taxes online Uncollected rent. Amend taxes online   If you are a cash-basis taxpayer, do not deduct uncollected rent. Amend taxes online Because you have not included it in your income, it is not deductible. Amend taxes online Vacant rental property. Amend taxes online   If you hold property for rental purposes, you may be able to deduct your ordinary and necessary expenses (including depreciation) for managing, conserving, or maintaining the property while the property is vacant. Amend taxes online However, you cannot deduct any loss of rental income for the period the property is vacant. Amend taxes online Vacant while listed for sale. Amend taxes online   If you sell property you held for rental purposes, you can deduct the ordinary and necessary expenses for managing, conserving, or maintaining the property until it is sold. Amend taxes online If the property is not held out and available for rent while listed for sale, the expenses are not deductible rental expenses. Amend taxes online Repairs and Improvements Generally, an expense for repairing or maintaining your rental property may be deducted if you are not required to capitalize the expense. Amend taxes online Improvements. Amend taxes online   You must capitalize any expense you pay to improve your rental property. Amend taxes online An expense is for an improvement if it results in a betterment to your property, restores your property, or adapts your property to a new or different use. Amend taxes online Betterments. Amend taxes online   Expenses that may result in a betterment to your property include expenses for fixing a pre-existing defect or condition, enlarging or expanding your property, or increasing the capacity, strength, or quality of your property. Amend taxes online Restoration. Amend taxes online   Expenses that may be for restoration include expenses for replacing a substantial structural part of your property, repairing damage to your property after you properly adjusted the basis of your property as a result of a casualty loss, or rebuilding your property to a like-new condition. Amend taxes online Adaptation. Amend taxes online   Expenses that may be for adaptation include expenses for altering your property to a use that is not consistent with the intended ordinary use of your property when you began renting the property. Amend taxes online Separate the costs of repairs and improvements, and keep accurate records. Amend taxes online You will need to know the cost of improvements when you sell or depreciate your property. Amend taxes online The expenses you capitalize for improving your property can generally be depreciated as if the improvement were separate property. Amend taxes online Other Expenses Other expenses you can deduct from your rental income include advertising, cleaning and maintenance, utilities, fire and liability insurance, taxes, interest, commissions for the collection of rent, ordinary and necessary travel and transportation, and other expenses, discussed next. Amend taxes online Insurance premiums paid in advance. Amend taxes online   If you pay an insurance premium for more than one year in advance, for each year of coverage you can deduct the part of the premium payment that will apply to that year. Amend taxes online You cannot deduct the total premium in the year you pay it. Amend taxes online Legal and other professional fees. Amend taxes online   You can deduct, as a rental expense, legal and other professional expenses, such as tax return preparation fees you paid to prepare Schedule E (Form 1040), Part I. Amend taxes online For example, on your 2013 Schedule E, you can deduct fees paid in 2013 to prepare your 2012 Schedule E, Part I. Amend taxes online You can also deduct, as a rental expense, any expense (other than federal taxes and penalties) you paid to resolve a tax underpayment related to your rental activities. Amend taxes online Local benefit taxes. Amend taxes online   In most cases, you cannot deduct charges for local benefits that increase the value of your property, such as charges for putting in streets, sidewalks, or water and sewer systems. Amend taxes online These charges are nondepreciable capital expenditures, and must be added to the basis of your property. Amend taxes online However, you can deduct local benefit taxes that are for maintaining, repairing, or paying interest charges for the benefits. Amend taxes online Local transportation expenses. Amend taxes online    You may be able to deduct your ordinary and necessary local transportation expenses if you incur them to collect rental income or to manage, conserve, or maintain your rental property. Amend taxes online However, transportation expenses incurred to travel between your home and a rental property generally constitute nondeductible commuting costs unless you use your home as your principal place of business. Amend taxes online See Publication 587, Business Use of Your Home, for information on determining if your home office qualifies as a principal place of business. Amend taxes online   Generally, if you use your personal car, pickup truck, or light van for rental activities, you can deduct the expenses using one of two methods: actual expenses or the standard mileage rate. Amend taxes online For 2013, the standard mileage rate for business use is 56. Amend taxes online 5 cents per mile. Amend taxes online For more information, see chapter 26. Amend taxes online    To deduct car expenses under either method, you must keep records that follow the rules in chapter 26. Amend taxes online In addition, you must complete Form 4562, Part V, and attach it to your tax return. Amend taxes online Rental of equipment. Amend taxes online   You can deduct the rent you pay for equipment that you use for rental purposes. Amend taxes online However, in some cases, lease contracts are actually purchase contracts. Amend taxes online If so, you cannot deduct these payments. Amend taxes online You can recover the cost of purchased equipment through depreciation. Amend taxes online Rental of property. Amend taxes online   You can deduct the rent you pay for property that you use for rental purposes. Amend taxes online If you buy a leasehold for rental purposes, you can deduct an equal part of the cost each year over the term of the lease. Amend taxes online Travel expenses. Amend taxes online   You can deduct the ordinary and necessary expenses of traveling away from home if the primary purpose of the trip is to collect rental income or to manage, conserve, or maintain your rental property. Amend taxes online You must properly allocate your expenses between rental and nonrental activities. Amend taxes online You cannot deduct the cost of traveling away from home if the primary purpose of the trip was to improve your property. Amend taxes online You recover the cost of improvements by taking depreciation. Amend taxes online For information on travel expenses, see chapter 26. Amend taxes online    To deduct travel expenses, you must keep records that follow the rules in chapter 26. Amend taxes online   See Rental Expenses in Publication 527 for more information. Amend taxes online Property Changed to Rental Use If you change your home or other property (or a part of it) to rental use at any time other than the beginning of your tax year, you must divide yearly expenses, such as taxes and insurance, between rental use and personal use. Amend taxes online You can deduct as rental expenses only the part of the expense that is for the part of the year the property was used or held for rental purposes. Amend taxes online You cannot deduct depreciation or insurance for the part of the year the property was held for personal use. Amend taxes online However, you can include the home mortgage interest, qualified mortgage insurance premiums, and real estate tax expenses for the part of the year the property was held for personal use as an itemized deduction on Schedule A (Form 1040). Amend taxes online Example. Amend taxes online Your tax year is the calendar year. Amend taxes online You moved from your home in May and started renting it out on June 1. Amend taxes online You can deduct as rental expenses seven-twelfths of your yearly expenses, such as taxes and insurance. Amend taxes online Starting with June, you can deduct as rental expenses the amounts you pay for items generally billed monthly, such as utilities. Amend taxes online Renting Part of Property If you rent part of your property, you must divide certain expenses between the part of the property used for rental purposes and the part of the property used for personal purposes, as though you actually had two separate pieces of property. Amend taxes online You can deduct the expenses related to the part of the property used for rental purposes, such as home mortgage interest, qualified mortgage insurance premiums, and real estate taxes, as rental expenses on Schedule E (Form 1040). Amend taxes online You can also deduct as rental expenses a portion of other expenses that normally are nondeductible personal expenses, such as expenses for electricity or painting the outside of your house. Amend taxes online There is no change in the types of expenses deductible for the personal-use part of your property. Amend taxes online Generally, these expenses may be deducted only if you itemize your deductions on Schedule A (Form 1040). Amend taxes online You cannot deduct any part of the cost of the first phone line even if your tenants have unlimited use of it. Amend taxes online You do not have to divide the expenses that belong only to the rental part of your property. Amend taxes online For example, if you paint a room that you rent, or if you pay premiums for liability insurance in connection with renting a room in your home, your entire cost is a rental expense. Amend taxes online If you install a second phone line strictly for your tenants' use, all of the cost of the second line is deductible as a rental expense. Amend taxes online You can deduct depreciation, discussed later, on the part of the house used for rental purposes as well as on the furniture and equipment you use for rental purposes. Amend taxes online How to divide expenses. Amend taxes online   If an expense is for both rental use and personal use, such as mortgage interest or heat for the entire house, you must divide the expense between the rental use and the personal use. Amend taxes online You can use any reasonable method for dividing the expense. Amend taxes online It may be reasonable to divide the cost of some items (for example, water) based on the number of people using them. Amend taxes online The two most common methods for dividing an expense are based on (1) the number of rooms in your home, and (2) the square footage of your home. Amend taxes online Not Rented for Profit If you do not rent your property to make a profit, you can deduct your rental expenses only up to the amount of your rental income. Amend taxes online You cannot deduct a loss or carry forward to the next year any rental expenses that are more than your rental income for the year. Amend taxes online For more information about the rules for an activity not engaged in for profit, see Not-for-Profit Activities in chapter 1 of Publication 535. Amend taxes online Where to report. Amend taxes online   Report your not-for-profit rental income on Form 1040, line 21. Amend taxes online For example, you can include your mortgage interest and any qualified mortgage insurance premiums (if you use the property as your main home or second home), real estate taxes, and casualty losses on the appropriate lines of Schedule A (Form 1040) if you itemize your deductions. Amend taxes online   If you itemize your deductions, claim your other rental expenses, subject to the rules explained in chapter 1 of Publication 535, as miscellaneous itemized deductions on Form 1040, Schedule A, line 23. Amend taxes online You can deduct these expenses only if they, together with certain other miscellaneous itemized deductions, total more than 2% of your adjusted gross income. Amend taxes online Personal Use of Dwelling Unit (Including Vacation Home) If you have any personal use of a dwelling unit (including a vacation home) that you rent, you must divide your expenses between rental use and personal use. Amend taxes online In general, your rental expenses will be no more than your total expenses multiplied by a fraction; the denominator of which is the total number of days the dwelling unit is used and the numerator of which is the total number of days actually rented at a fair rental price. Amend taxes online Only your rental expenses may be deducted on Schedule E (Form 1040). Amend taxes online Some of your personal expenses may be deductible if you itemize your deductions on Schedule A (Form 1040). Amend taxes online You must also determine if the dwelling unit is considered a home. Amend taxes online The amount of rental expenses that you can deduct may be limited if the dwelling unit is considered a home. Amend taxes online Whether a dwelling unit is considered a home depends on how many days during the year are considered to be days of personal use. Amend taxes online There is a special rule if you used the dwelling unit as a home and you rented it for less than 15 days during the year. Amend taxes online Dwelling unit. Amend taxes online   A dwelling unit includes a house, apartment, condominium, mobile home, boat, vacation home, or similar property. Amend taxes online It also includes all structures or other property belonging to the dwelling unit. Amend taxes online A dwelling unit has basic living accommodations, such as sleeping space, a toilet, and cooking facilities. Amend taxes online   A dwelling unit does not include property used solely as a hotel, motel, inn, or similar establishment. Amend taxes online Property is used solely as a hotel, motel, inn, or similar establishment if it is regularly available for occupancy by paying customers and is not used by an owner as a home during the year. Amend taxes online Example. Amend taxes online   You rent a room in your home that is always available for short-term occupancy by paying customers. Amend taxes online You do not use the room yourself, and you allow only paying customers to use the room. Amend taxes online The room is used solely as a hotel, motel, inn, or similar establishment and is not a dwelling unit. Amend taxes online Dividing Expenses If you use a dwelling unit for both rental and personal purposes, divide your expenses between the rental use and the personal use based on the number of days used for each purpose. Amend taxes online When dividing your expenses, follow these rules. Amend taxes online Any day that the unit is rented at a fair rental price is a day of rental use even if you used the unit for personal purposes that day. Amend taxes online This rule does not apply when determining whether you used the unit as a home. Amend taxes online Any day that the unit is available for rent but not actually rented is not a day of rental use. Amend taxes online Example. Amend taxes online Your beach cottage was available for rent from June 1 through August 31 (92 days). Amend taxes online During that time, except for the first week in August (7 days) when you were unable to find a renter, you rented the cottage at a fair rental price. Amend taxes online The person who rented the cottage for July allowed you to use it over the weekend (2 days) without any reduction in or refund of rent. Amend taxes online Your family also used the cottage during the last 2 weeks of May (14 days). Amend taxes online The cottage was not used at all before May 17 or after August 31. Amend taxes online You figure the part of the cottage expenses to treat as rental expenses as follows. Amend taxes online The cottage was used for rental a total of 85 days (92 − 7). Amend taxes online The days it was available for rent but not rented (7 days) are not days of rental use. Amend taxes online The July weekend (2 days) you used it is rental use because you received a fair rental price for the weekend. Amend taxes online You used the cottage for personal purposes for 14 days (the last 2 weeks in May). Amend taxes online The total use of the cottage was 99 days (14 days personal use + 85 days rental use). Amend taxes online Your rental expenses are 85/99 (86%) of the cottage expenses. Amend taxes online Note. Amend taxes online When determining whether you used the cottage as a home, the July weekend (2 days) you used it is considered personal use even though you received a fair rental price for the weekend. Amend taxes online Therefore, you had 16 days of personal use and 83 days of rental use for this purpose. Amend taxes online Because you used the cottage for personal purposes more than 14 days and more than 10% of the days of rental use (8 days), you used it as a home. Amend taxes online If you have a net loss, you may not be able to deduct all of the rental expenses. Amend taxes online See Dwelling Unit Used as a Home, next. Amend taxes online Dwelling Unit Used as a Home If you use a dwelling unit for both rental and personal purposes, the tax treatment of the rental expenses you figured earlier under Dividing Expenses and rental income depends on whether you are considered to be using the dwelling unit as a home. Amend taxes online You use a dwelling unit as a home during the tax year if you use it for personal purposes more than the greater of: 14 days, or 10% of the total days it is rented to others at a fair rental price. Amend taxes online See What is a day of personal use , later. Amend taxes online Fair rental price. Amend taxes online   A fair rental price for your property generally is the amount of rent that a person who is not related to you would be willing to pay. Amend taxes online The rent you charge is not a fair rental price if it is substantially less than the rents charged for other properties that are similar to your property in your area. Amend taxes online   If a dwelling unit is used for personal purposes on a day it is rented at a fair rental price, do not count that day as a day of rental use in applying (2) above. Amend taxes online Instead, count it as a day of personal use in applying both (1) and (2) above. Amend taxes online What is a day of personal use?   A day of personal use of a dwelling unit is any day that the unit is used by any of the following persons. Amend taxes online You or any other person who has an interest in the unit, unless you rent it to another owner as his or her main home under a shared equity financing agreement (defined later). Amend taxes online However, see Days used as a main home before or after renting , later. Amend taxes online A member of your family or a member of the family of any other person who owns an interest in the unit, unless the family member uses the dwelling unit as his or her main home and pays a fair rental price. Amend taxes online Family includes only your spouse, brothers and sisters, half-brothers and half-sisters, ancestors (parents, grandparents, etc. Amend taxes online ), and lineal descendants (children, grandchildren, etc. Amend taxes online ). Amend taxes online Anyone under an arrangement that lets you use some other dwelling unit. Amend taxes online Anyone at less than a fair rental price. Amend taxes online Main home. Amend taxes online   If the other person or member of the family in (1) or (2) above has more than one home, his or her main home is ordinarily the one he or she lived in most of the time. Amend taxes online Shared equity financing agreement. Amend taxes online   This is an agreement under which two or more persons acquire undivided interests for more than 50 years in an entire dwelling unit, including the land, and one or more of the co-owners is entitled to occupy the unit as his or her main home upon payment of rent to the other co-owner or owners. Amend taxes online Donation of use of property. Amend taxes online   You use a dwelling unit for personal purposes if: You donate the use of the unit to a charitable organization, The organization sells the use of the unit at a fund-raising event, and The “purchaser” uses the unit. Amend taxes online Examples. Amend taxes online   The following examples show how to determine days of personal use. Amend taxes online Example 1. Amend taxes online You and your neighbor are co-owners of a condominium at the beach. Amend taxes online Last year, you rented the unit to vacationers whenever possible. Amend taxes online The unit was not used as a main home by anyone. Amend taxes online Your neighbor used the unit for 2 weeks last year; you did not use it at all. Amend taxes online Because your neighbor has an interest in the unit, both of you are considered to have used the unit for personal purposes during those 2 weeks. Amend taxes online Example 2. Amend taxes online You and your neighbors are co-owners of a house under a shared equity financing agreement. Amend taxes online Your neighbors live in the house and pay you a fair rental price. Amend taxes online Even though your neighbors have an interest in the house, the days your neighbors live there are not counted as days of personal use by you. Amend taxes online This is because your neighbors rent the house as their main home under a shared equity financing agreement. Amend taxes online Example 3. Amend taxes online You own a rental property that you rent to your son. Amend taxes online Your son does not own any interest in this property. Amend taxes online He uses it as his main home and pays you a fair rental price. Amend taxes online Your son's use of the property is not personal use by you because your son is using it as his main home, he owns no interest in the property, and he is paying you a fair rental price. Amend taxes online Example 4. Amend taxes online You rent your beach house to Joshua. Amend taxes online Joshua rents his cabin in the mountains to you. Amend taxes online You each pay a fair rental price. Amend taxes online You are using your house for personal purposes on the days that Joshua uses it because your house is used by Joshua under an arrangement that allows you to use his house. Amend taxes online Days used for repairs and maintenance. Amend taxes online   Any day that you spend working substantially full time repairing and maintaining (not improving) your property is not counted as a day of personal use. Amend taxes online Do not count such a day as a day of personal use even if family members use the property for recreational purposes on the same day. Amend taxes online Days used as a main home before or after renting. Amend taxes online   For purposes of determining whether a dwelling unit was used as a home, you may not have to count days you used the property as your main home before or after renting it or offering it for rent as days of personal use. Amend taxes online Do not count them as days of personal use if: You rented or tried to rent the property for 12 or more consecutive months. Amend taxes online You rented or tried to rent the property for a period of less than 12 consecutive months and the period ended because you sold or exchanged the property. Amend taxes online However, this special rule does not apply when dividing expenses between rental and personal use. Amend taxes online Examples. Amend taxes online   The following examples show how to determine whether you used your rental property as a home. Amend taxes online Example 1. Amend taxes online You converted the basement of your home into an apartment with a bedroom, a bathroom, and a small kitchen. Amend taxes online You rented the basement apartment at a fair rental price to college students during the regular school year. Amend taxes online You rented to them on a 9-month lease (273 days). Amend taxes online You figured 10% of the total days rented to others at a fair rental price is 27 days. Amend taxes online During June (30 days), your brothers stayed with you and lived in the basement apartment rent free. Amend taxes online Your basement apartment was used as a home because you used it for personal purposes for 30 days. Amend taxes online Rent-free use by your brothers is considered personal use. Amend taxes online Your personal use (30 days) is more than the greater of 14 days or 10% of the total days it was rented (27 days). Amend taxes online Example 2. Amend taxes online You rented the guest bedroom in your home at a fair rental price during the local college's homecoming, commencement, and football weekends (a total of 27 days). Amend taxes online Your sister-in-law stayed in the room, rent free, for the last 3 weeks (21 days) in July. Amend taxes online You figured 10% of the total days rented to others at a fair rental price is 3 days. Amend taxes online The room was used as a home because you used it for personal purposes for 21 days. Amend taxes online That is more than the greater of 14 days or 10% of the 27 days it was rented (3 days). Amend taxes online Example 3. Amend taxes online You own a condominium apartment in a resort area. Amend taxes online You rented it at a fair rental price for a total of 170 days during the year. Amend taxes online For 12 of those days, the tenant was not able to use the apartment and allowed you to use it even though you did not refund any of the rent. Amend taxes online Your family actually used the apartment for 10 of those days. Amend taxes online Therefore, the apartment is treated as having been rented for 160 (170 − 10) days. Amend taxes online You figured 10% of the total days rented to others at a fair rental price is 16 days. Amend taxes online Your family also used the apartment for 7 other days during the year. Amend taxes online You used the apartment as a home because you used it for personal purposes for 17 days. Amend taxes online That is more than the greater of 14 days or 10% of the 160 days it was rented (16 days). Amend taxes online Minimal rental use. Amend taxes online   If you use the dwelling unit as a home and you rent it less than 15 days during the year, that period is not treated as rental activity. Amend taxes online See Used as a home but rented less than 15 days , later, for more information. Amend taxes online Limit on deductions. Amend taxes online   Renting a dwelling unit that is considered a home is not a passive activity. Amend taxes online Instead, if your rental expenses are more than your rental income, some or all of the excess expenses cannot be used to offset income from other sources. Amend taxes online The excess expenses that cannot be used to offset income from other sources are carried forward to the next year and treated as rental expenses for the same property. Amend taxes online Any expenses carried forward to the next year will be subject to any limits that apply for that year. Amend taxes online This limitation will apply to expenses carried forward to another year even if you do not use the property as your home for that subsequent year. Amend taxes online   To figure your deductible rental expenses for this year and any carryover to next year, use Worksheet 9-1. Amend taxes online Reporting Income and Deductions Property not used for personal purposes. Amend taxes online   If you do not use a dwelling unit for personal purposes, see How To Report Rental Income and Expenses , later, for how to report your rental income and expenses. Amend taxes online Property used for personal purposes. Amend taxes online   If you do use a dwelling unit for personal purposes, then how you report your rental income and expenses depends on whether you used the dwelling unit as a home. Amend taxes online Not used as a home. Amend taxes online   If you use a dwelling unit for personal purposes, but not as a home, report all the rental income in your income. Amend taxes online Since you used the dwelling unit for personal purposes, you must divide your expenses between the rental use and the personal use as described earlier in Dividing Expenses . Amend taxes online The expenses for personal use are not deductible as rental expenses. Amend taxes online   Your deductible rental expenses can be more than your gross rental income; however, see Limits on Rental Losses , later. Amend taxes online Used as a home but rented less than 15 days. Amend taxes online   If you use a dwelling unit as a home and you rent it less than 15 days during the year, its primary function is not considered to be rental and it should not be reported on Schedule E (Form 1040). Amend taxes online You are not required to report the rental income and rental expenses from this activity. Amend taxes online The expenses, including qualified mortgage interest, property taxes, and any qualified casualty loss will be reported as normally allowed on Schedule A (Form 1040). Amend taxes online See the Instructions for Schedule A (Form 1040) for more information on deducting these expenses. Amend taxes online Used as a home and rented 15 days or more. Amend taxes online   If you use a dwelling unit as a home and rent it 15 days or more during the year, include all your rental income in your income. Amend taxes online Since you used the dwelling unit for personal purposes, you must divide your expenses between the rental use and the personal use as described earlier in Dividing Expenses . Amend taxes online The expenses for personal use are not deductible as rental expenses. Amend taxes online   If you had a net profit from renting the dwelling unit for the year (that is, if your rental income is more than the total of your rental expenses, including depreciation), deduct all of your rental expenses. Amend taxes online You do not need to use Worksheet 9-1. Amend taxes online   However, if you had a net loss from renting the dwelling unit for the year, your deduction for certain rental expenses is limited. Amend taxes online To figure your deductible rental expenses and any carryover to next year, use Worksheet 9-1. Amend taxes online Depreciation You recover the cost of income-producing property through yearly tax deductions. Amend taxes online You do this by depreciating the property; that is, by deducting some of the cost each year on your tax return. Amend taxes online Three factors determine how much depreciation you can deduct each year: (1) your basis in the property, (2) the recovery period for the property, and (3) the depreciation method used. Amend taxes online You cannot simply deduct your mortgage or principal payments, or the cost of furniture, fixtures, and equipment, as an expense. Amend taxes online You can deduct depreciation only on the part of your property used for rental purposes. Amend taxes online Depreciation reduces your basis for figuring gain or loss on a later sale or exchange. Amend taxes online You may have to use Form 4562 to figure and report your depreciation. Amend taxes online See How To Report Rental Income and Expenses , later. Amend taxes online Alternative minimum tax (AMT). Amend taxes online    If you use accelerated depreciation, you may be subject to the AMT. Amend taxes online Accelerated depreciation allows you to deduct more depreciation earlier in the recovery period than you could deduct using a straight line method (same deduction each year). Amend taxes online Claiming the correct amount of depreciation. Amend taxes online   You should claim the correct amount of depreciation each tax year. Amend taxes online If you did not claim all the depreciation you were entitled to deduct, you must still reduce your basis in the property by the full amount of depreciation that you could have deducted. Amend taxes online   If you deducted an incorrect amount of depreciation for property in any year, you may be able to make a correction by filing Form 1040X, Amended U. Amend taxes online S Individual Income Tax Return. Amend taxes online If you are not allowed to make the correction on an amended return, you can change your accounting method to claim the correct amount of depreciation. Amend taxes online See Claiming the correct amount of depreciation in chapter 2 of Publication 527 for more information. Amend taxes online Changing your accounting method to deduct unclaimed depreciation. Amend taxes online   To change your accounting method, you generally must file Form 3115, Application for Change in Accounting Method, to get the consent of the IRS. Amend taxes online In some instances, that consent is automatic. Amend taxes online For more information, see chapter 1 of Publication 946. Amend taxes online Land. Amend taxes online   You cannot depreciate the cost of land because land generally does not wear out, become obsolete, or get used up. Amend taxes online The costs of clearing, grading, planting, and landscaping are usually all part of the cost of land and cannot be depreciated. Amend taxes online More information. Amend taxes online   See Publication 527 for more information about depreciating rental property and see Publication 946 for more information about depreciation. Amend taxes online Limits on Rental Losses If you have a loss from your rental real estate activity, two sets of rules may limit the amount of loss you can deduct. Amend taxes online You must consider these rules in the order shown below. Amend taxes online At-risk rules. Amend taxes online These rules are applied first if there is investment in your rental real estate activity for which you are not at risk. Amend taxes online This applies only if the real property was placed in service after 1986. Amend taxes online Passive activity limits. Amend taxes online Generally, rental real estate activities are considered passive activities and losses are not deductible unless you have income from other passive activities to offset them. Amend taxes online However, there are exceptions. Amend taxes online At-Risk Rules You may be subject to the at-risk rules if you have: A loss from an activity carried on as a trade or business or for the production of income, and Amounts invested in the activity for which you are not fully at risk. Amend taxes online Losses from holding real property (other than mineral property) placed in service before 1987 are not subject to the at-risk rules. Amend taxes online In most cases, any loss from an activity subject to the at-risk rules is allowed only to the extent of the total amount you have at risk in the activity at the end of the tax year. Amend taxes online You are considered at risk in an activity to the extent of cash and the adjusted basis of other property you contributed to the activity and certain amounts borrowed for use in the activity. Amend taxes online See Publication 925 for more information. Amend taxes online Passive Activity Limits In most cases, all rental real estate activities (except those of certain real estate professionals, discussed later) are passive activities. Amend taxes online For this purpose, a rental activity is an activity from which you receive income mainly for the use of tangible property, rather than for services. Amend taxes online Limits on passive activity deductions and credits. Amend taxes online    Deductions or losses from passive activities are limited. Amend taxes online You generally cannot offset income, other than passive income, with losses from passive activities. Amend taxes online Nor can you offset taxes on income, other than passive income, with credits resulting from passive activities. Amend taxes online Any excess loss or credit is carried forward to the next tax year. Amend taxes online   For a detailed discussion of these rules, see Publication 925. Amend taxes online    You may have to complete Form 8582 to figure the amount of any passive activity loss for the current tax year for all activities and the amount of the passive activity loss allowed on your tax return. Amend taxes online Real estate professionals. Amend taxes online   Rental activities in which you materially participated during the year are not passive activities if, for that year, you were a real estate professional. Amend taxes online For a detailed discussion of the requirements, see Publication 527. Amend taxes online For a detailed discussion of material participation, see Publication 925. Amend taxes online Exception for Personal Use of Dwelling Unit If you used the rental property as a home during the year, any income, deductions, gain, or loss allocable to such use shall not be taken into account for purposes of the passive activity loss limitation. Amend taxes online Instead, follow the rules explained in Personal Use of Dwelling Unit (Including Vacation Home), earlier. Amend taxes online Exception for Rental Real Estate Activities With Active Participation If you or your spouse actively participated in a passive rental real estate activity, you may be able to deduct up to $25,000 of loss from the activity from your nonpassive income. Amend taxes online This special allowance is an exception to the general rule disallowing losses in excess of income from passive activities. Amend taxes online Similarly, you may be able to offset credits from the activity against the tax on up to $25,000 of nonpassive income after taking into account any losses allowed under this exception. Amend taxes online Active participation. Amend taxes online   You actively participated in a rental real estate activity if you (and your spouse) owned at least 10% of the rental property and you made management decisions or arranged for others to provide services (such as repairs) in a significant and bona fide sense. Amend taxes online Management decisions that may count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and similar decisions. Amend taxes online Maximum special allowance. Amend taxes online   The maximum special allowance is: $25,000 for single individuals and married individuals filing a joint return for the tax year, $12,500 for married individuals who file separate returns for the tax year and lived apart from their spouses at all times during the tax year, and $25,000 for a qualifying estate reduced by the special allowance for which the surviving spouse qualified. Amend taxes online   If your modified adjusted gross income (MAGI) is $100,000 or less ($50,000 or less if married filing separately), you can deduct your loss up to the amount specified above. Amend taxes online If your MAGI is more than $100,000 (more than $50,000 if married filing separately), your special allowance is limited to 50% of the difference between $150,000 ($75,000 if married filing separately) and your MAGI. Amend taxes online   Generally, if your MAGI is $150,000 or more ($75,000 or more if you are married filing separately), there is no special allowance. Amend taxes online More information. Amend taxes online   See Publication 925 for more information on the passive loss limits, including information on the treatment of unused disallowed passive losses and credits and the treatment of gains and losses realized on the disposition of a passive activity. Amend taxes online How To Report Rental Income and Expenses The basic form for reporting residential rental income and expenses is Schedule E (Form 1040). Amend taxes online However, do not use that schedule to report a not-for-profit activity. Amend taxes online See Not Rented for Profit, earlier. Amend taxes online Providing substantial services. Amend taxes online   If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, report your rental income and expenses on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business (Sole Proprietorship). Amend taxes online Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc. Amend taxes online For information, see Publication 334, Tax Guide for Small Business. Amend taxes online You also may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. Amend taxes online   Use Form 1065, U. Amend taxes online S. Amend taxes online Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). Amend taxes online Qualified joint venture. Amend taxes online   If you and your spouse each materially participate as the only members of a jointly owned and operated real estate business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership. Amend taxes online This election, in most cases, will not increase the total tax owed on the joint return, but it does give each of you credit for social security earnings on which retirement benefits are based and for Medicare coverage if your rental income is subject to self-employment tax. Amend taxes online For more information, see Publication 527. Amend taxes online Form 1098, Mortgage Interest Statement. Amend taxes online    If you paid $600 or more of mortgage interest on your rental property to any one person, you should receive a Form 1098, or similar statement showing the interest you paid for the year. Amend taxes online If you and at least one other person (other than your spouse if you file a joint return) were liable for, and paid interest on the mortgage, and the other person received the Form 1098, report your share of the interest on Schedule E (Form 1040), line 13. Amend taxes online Attach a statement to your return showing the name and address of the other person. Amend taxes online In the left margin of Schedule E, next to line 13, enter “See attached. Amend taxes online ” Schedule E (Form 1040) If you rent buildings, rooms, or apartments, and provide basic services such as heat and light, trash collection, etc. Amend taxes online , you normally report your rental income and expenses on Schedule E, Part I. Amend taxes online List your total income, expenses, and depreciation for each rental property. Amend taxes online Be sure to enter the number of fair rental and personal use days on line 2. Amend taxes online If you have more than three rental or royalty properties, complete and attach as many Schedules E as are needed to list the properties. Amend taxes online Complete lines 1 and 2 for each property. Amend taxes online However, fill in lines 23a through 26 on only one Schedule E. Amend taxes online On Schedule E, page 1, line 18, enter the depreciation you are claiming for each property. Amend taxes online To find out if you need to attach Form 4562, see Form 4562, in chapter 3 of Publication 527. Amend taxes online If you have a loss from your rental real estate activity, you also may need to complete one or both of the following forms. Amend taxes online Form 6198, At-Risk Limitations. Amend taxes online See At-Risk Rules , earlier. Amend taxes online Also see Publication 925. Amend taxes online Form 8582, Passive Activity Loss Limitations. Amend taxes online See Passive Activity Limits , earlier. Amend taxes online Page 2 of Schedule E is used to report income or loss from partnerships, S corporations, estates, trusts, and real estate mortgage investment conduits. Amend taxes online If you need to use page 2 of Schedule E, be sure to use page 2 of the same Schedule E you used to enter your rental activity on page 1. Amend taxes online Also, include the amount from line 26 (Part I) in the “Total income or (loss)” on line 41 (Part V). Amend taxes online Worksheet 9-1. Amend taxes online Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Use this worksheet only if you answer “yes” to all of the following questions. Amend taxes online Did you use the dwelling unit as a home this year? (See Dwelling Unit Used as a Home . Amend taxes online ) Did you rent the dwelling unit at a fair rental price 15 days or more this year? Is the total of your rental expenses and depreciation more than your rental income? PART I. Amend taxes online Rental Use Percentage A. Amend taxes online Total days available for rent at fair rental price A. Amend taxes online       B. Amend taxes online Total days available for rent (line A) but not rented B. Amend taxes online       C. Amend taxes online Total days of rental use. Amend taxes online Subtract line B from line A C. Amend taxes online       D. Amend taxes online Total days of personal use (including days rented at less than fair rental price) D. Amend taxes online       E. Amend taxes online Total days of rental and personal use. Amend taxes online Add lines C and D E. Amend taxes online       F. Amend taxes online Percentage of expenses allowed for rental. Amend taxes online Divide line C by line E     F. Amend taxes online   PART II. Amend taxes online Allowable Rental Expenses 1. Amend taxes online Enter rents received 1. Amend taxes online   2a. Amend taxes online Enter the rental portion of deductible home mortgage interest and qualified mortgage insurance premiums (see instructions) 2a. Amend taxes online       b. Amend taxes online Enter the rental portion of real estate taxes b. Amend taxes online       c. Amend taxes online Enter the rental portion of deductible casualty and theft losses (see instructions) c. Amend taxes online       d. Amend taxes online Enter direct rental expenses (see instructions) d. Amend taxes online       e. Amend taxes online Fully deductible rental expenses. Amend taxes online Add lines 2a–2d. Amend taxes online Enter here and  on the appropriate lines on Schedule E (see instructions) 2e. Amend taxes online   3. Amend taxes online Subtract line 2e from line 1. Amend taxes online If zero or less, enter -0- 3. Amend taxes online   4a. Amend taxes online Enter the rental portion of expenses directly related to operating or maintaining  the dwelling unit (such as repairs, insurance, and utilities) 4a. Amend taxes online       b. Amend taxes online Enter the rental portion of excess mortgage interest and qualified mortgage insurance premiums (see instructions) b. Amend taxes online       c. Amend taxes online Carryover of operating expenses from 2012 worksheet c. Amend taxes online       d. Amend taxes online Add lines 4a–4c d. Amend taxes online       e. Amend taxes online Allowable expenses. Amend taxes online Enter the smaller of line 3 or line 4d (see instructions) 4e. Amend taxes online   5. Amend taxes online Subtract line 4e from line 3. Amend taxes online If zero or less, enter -0- 5. Amend taxes online   6a. Amend taxes online Enter the rental portion of excess casualty and theft losses (see instructions) 6a. Amend taxes online       b. Amend taxes online Enter the rental portion of depreciation of the dwelling unit b. Amend taxes online       c. Amend taxes online Carryover of excess casualty losses and depreciation from 2012 worksheet c. Amend taxes online       d. Amend taxes online Add lines 6a–6c d. Amend taxes online       e. Amend taxes online Allowable excess casualty and theft losses and depreciation. Amend taxes online Enter the smaller of  line 5 or line 6d (see instructions) 6e. Amend taxes online   PART III. Amend taxes online Carryover of Unallowed Expenses to Next Year 7a. Amend taxes online Operating expenses to be carried over to next year. Amend taxes online Subtract line 4e from line 4d 7a. Amend taxes online   b. Amend taxes online Excess casualty and theft losses and depreciation to be carried over to next year. Amend taxes online  Subtract line 6e from line 6d b. Amend taxes online   Worksheet 9-1 Instructions. Amend taxes online Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Caution. Amend taxes online Use the percentage determined in Part I, line F, to figure the rental portions to enter on lines 2a–2c, 4a–4b, and 6a–6b of  Part II. Amend taxes online Line 2a. Amend taxes online Figure the mortgage interest on the dwelling unit that you could deduct on Schedule A as if you had not rented the unit. Amend taxes online Do not include interest on a loan that did not benefit the dwelling unit. Amend taxes online For example, do not include interest on a home equity loan used to pay off credit cards or other personal loans, buy a car, or pay college tuition. Amend taxes online Include interest on a loan used to buy, build, or improve the dwelling unit, or to refinance such a loan. Amend taxes online Include the rental portion of this interest in the total you enter on line 2a of the worksheet. Amend taxes online   Figure the qualified mortgage insurance premiums on the dwelling unit that you could deduct on line 13 of Schedule A as if you had not rented the unit. Amend taxes online See the Schedule A instructions. Amend taxes online However, figure your adjusted gross income (Form 1040, line 38) without your rental income and expenses from the dwelling unit. Amend taxes online See Line 4b to deduct the part of the qualified mortgage insurance premiums not allowed because of the adjusted gross income limit. Amend taxes online Include the rental portion of the amount from Schedule A, line 13, in the total you enter on line 2a of the worksheet. Amend taxes online   Note. Amend taxes online Do not file this Schedule A or use it to figure the amount to deduct on line 13 of that schedule. Amend taxes online Instead, figure the personal portion on a separate Schedule A. Amend taxes online If you have deducted mortgage interest or qualified mortgage insurance premiums on the dwelling unit on other forms, such as Schedule C or F, remember to reduce your Schedule A deduction by that amount. Amend taxes online           Line 2c. Amend taxes online Figure the casualty and theft losses related to the dwelling unit that you could deduct on Schedule A as if you had not rented the dwelling unit. Amend taxes online To do this, complete Section A of Form 4684, Casualties and Thefts, treating the losses as personal losses. Amend taxes online If any of the loss is due to a federally declared disaster, see the Instructions for Form 4684. Amend taxes online On Form 4684, line 17, enter 10% of your adjusted gross income figured without your rental income and expenses from the dwelling unit. Amend taxes online Enter the rental portion of the result from Form 4684, line 18, on line 2c of this worksheet. Amend taxes online   Note. Amend taxes online Do not file this Form 4684 or use it to figure your personal losses on Schedule A. Amend taxes online Instead, figure the personal portion on a separate Form 4684. Amend taxes online           Line 2d. Amend taxes online Enter the total of your rental expenses that are directly related only to the rental activity. Amend taxes online These include interest on loans used for rental activities other than to buy, build, or improve the dwelling unit. Amend taxes online Also include rental agency fees, advertising, office supplies, and depreciation on office equipment used in your rental activity. Amend taxes online           Line 2e. Amend taxes online You can deduct the amounts on lines 2a, 2b, 2c, and 2d as rental expenses on Schedule E even if your rental expenses are more than your rental income. Amend taxes online Enter the amounts on lines 2a, 2b, 2c, and 2d on the appropriate lines of Schedule E. Amend taxes online           Line 4b. Amend taxes online On line 2a, you entered the rental portion of the mortgage interest and qualified mortgage insurance premiums you could deduct on Schedule A if you had not rented the dwelling unit. Amend taxes online If you had additional mortgage interest and qualified mortgage insurance premiums that would not be deductible on Schedule A because of limits imposed on them, enter on line 4b of this worksheet the rental portion of those excess amounts. Amend taxes online Do not include interest on a loan that did not benefit the dwelling unit (as explained in the line 2a instructions). Amend taxes online           Line 4e. Amend taxes online You can deduct the amounts on lines 4a, 4b, and 4c as rental expenses on Schedule E only to the extent they are not more than the amount on line 4e. Amend taxes online *           Line 6a. Amend taxes online To find the rental portion of excess casualty and theft losses, use the Form 4684 you prepared for line 2c of this worksheet. Amend taxes online   A. Amend taxes online Enter the amount from Form 4684, line 10       B. Amend taxes online Enter the rental portion of line A       C. Amend taxes online Enter the amount from line 2c of this worksheet       D. Amend taxes online Subtract line C from line B. Amend taxes online Enter the result here and on line 6a of this worksheet               Line 6e. Amend taxes online You can deduct the amounts on lines 6a, 6b, and 6c as rental expenses on Schedule E only to the extent they are not more than the amount on line 6e. Amend taxes online * *Allocating the limited deduction. Amend taxes online If you cannot deduct all of the amount on line 4d or 6d this year, you can allocate the allowable deduction in any way you wish among the expenses included on line 4d or 6d. Amend taxes online Enter the amount you allocate to each expense on the appropriate line of Schedule E, Part I. Amend taxes online Prev  Up  Next   Home   More Online Publications