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Form 1040ez Booklet

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Form 1040ez Booklet

Form 1040ez booklet 3. Form 1040ez booklet   Personal Exemptions and Dependents Table of Contents What's New Introduction Useful Items - You may want to see: ExemptionsPersonal Exemptions Exemptions for Dependents Qualifying Child Qualifying Relative Phaseout of Exemptions Social Security Numbers for DependentsBorn and died in 2013. Form 1040ez booklet Taxpayer identification numbers for aliens. Form 1040ez booklet Taxpayer identification numbers for adoptees. Form 1040ez booklet What's New Exemption amount. Form 1040ez booklet  The amount you can deduct for each exemption has increased. Form 1040ez booklet It was $3,800 for 2012. Form 1040ez booklet It is $3,900 for 2013. Form 1040ez booklet Exemption phaseout. Form 1040ez booklet  You lose at least part of the benefit of your exemptions if your adjusted gross income is more than a certain amount. Form 1040ez booklet For 2013, this amount is $150,000 for a married individual filing a separate return; $250,000 for a single individual; $275,000 for a head of household; and $300,000 for married individuals filing jointly or a qualifying widow(er). Form 1040ez booklet See Phaseout of Exemptions , later. Form 1040ez booklet Introduction This chapter discusses the following topics. Form 1040ez booklet Personal exemptions — You generally can take one for yourself and, if you are married, one for your spouse. Form 1040ez booklet Exemptions for dependents — You generally can take an exemption for each of your dependents. Form 1040ez booklet A dependent is your qualifying child or qualifying relative. Form 1040ez booklet If you are entitled to claim an exemption for a dependent, that dependent cannot claim a personal exemption on his or her own tax return. Form 1040ez booklet Phaseout of exemptions — Your deduction is reduced if your adjusted gross income is more than a certain amount. Form 1040ez booklet Social security number (SSN) requirement for dependents — You must list the SSN of any dependent for whom you claim an exemption. Form 1040ez booklet Deduction. Form 1040ez booklet   Exemptions reduce your taxable income. Form 1040ez booklet You can deduct $3,900 for each exemption you claim in 2013. Form 1040ez booklet But you may lose at least part of the dollar amount of your exemptions if your adjusted gross income is more than a certain amount. Form 1040ez booklet See Phaseout of Exemptions , later. Form 1040ez booklet How to claim exemptions. Form 1040ez booklet    How you claim an exemption on your tax return depends on which form you file. Form 1040ez booklet    If you file Form 1040EZ, the exemption amount is combined with the standard deduction amount and entered on line 5. Form 1040ez booklet    If you file Form 1040A, complete lines 6a through 6d. Form 1040ez booklet The total number of exemptions you can claim is the total in the box on line 6d. Form 1040ez booklet Also complete line 26. Form 1040ez booklet   If you file Form 1040, complete lines 6a through 6d. Form 1040ez booklet The total number of exemptions you can claim is the total in the box on line 6d. Form 1040ez booklet Also complete line 42. Form 1040ez booklet Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information Form (and Instructions) 2120 Multiple Support Declaration 8332 Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent Exemptions There are two types of exemptions you may be able to take: Personal exemptions for yourself and your spouse, and Exemptions for dependents (dependency exemptions). Form 1040ez booklet While each is worth the same amount ($3,900 for 2013), different rules apply to each type. Form 1040ez booklet Personal Exemptions You are generally allowed one exemption for yourself. Form 1040ez booklet If you are married, you may be allowed one exemption for your spouse. Form 1040ez booklet These are called personal exemptions. Form 1040ez booklet Your Own Exemption You can take one exemption for yourself unless you can be claimed as a dependent by another taxpayer. Form 1040ez booklet If another taxpayer is entitled to claim you as a dependent, you cannot take an exemption for yourself even if the other taxpayer does not actually claim you as a dependent. Form 1040ez booklet Your Spouse's Exemption Your spouse is never considered your dependent. Form 1040ez booklet Joint return. Form 1040ez booklet   On a joint return you can claim one exemption for yourself and one for your spouse. Form 1040ez booklet Separate return. Form 1040ez booklet   If you file a separate return, you can claim an exemption for your spouse only if your spouse had no gross income, is not filing a return, and was not the dependent of another taxpayer. Form 1040ez booklet This is true even if the other taxpayer does not actually claim your spouse as a dependent. Form 1040ez booklet You can claim an exemption for your spouse even if he or she is a nonresident alien; in that case, your spouse must have no gross income for U. Form 1040ez booklet S. Form 1040ez booklet tax purposes, must not be filing a return, and must not be the dependent of another taxpayer. Form 1040ez booklet Death of spouse. Form 1040ez booklet   If your spouse died during the year and you file a joint return for yourself and your deceased spouse, you generally can claim your spouse's exemption under the rules just explained in Joint return . Form 1040ez booklet If you file a separate return for the year, you may be able to claim your spouse's exemption under the rules just described in Separate return . Form 1040ez booklet   If you remarried during the year, you cannot take an exemption for your deceased spouse. Form 1040ez booklet   If you are a surviving spouse without gross income and you remarry in the year your spouse died, you can be claimed as an exemption on both the final separate return of your deceased spouse and the separate return of your new spouse for that year. Form 1040ez booklet If you file a joint return with your new spouse, you can be claimed as an exemption only on that return. Form 1040ez booklet Divorced or separated spouse. Form 1040ez booklet   If you obtained a final decree of divorce or separate maintenance during the year, you cannot take your former spouse's exemption. Form 1040ez booklet This rule applies even if you provided all of your former spouse's support. Form 1040ez booklet Exemptions for Dependents You are allowed one exemption for each person you can claim as a dependent. Form 1040ez booklet You can claim an exemption for a dependent even if your dependent files a return. Form 1040ez booklet The term “dependent” means: A qualifying child, or A qualifying relative. Form 1040ez booklet The terms “ qualifying child ” and “ qualifying relative ” are defined later. Form 1040ez booklet You can claim an exemption for a qualifying child or qualifying relative only if these three tests are met. Form 1040ez booklet Dependent taxpayer test. Form 1040ez booklet Joint return test. Form 1040ez booklet Citizen or resident test. Form 1040ez booklet These three tests are explained in detail later. Form 1040ez booklet All the requirements for claiming an exemption for a dependent are summarized in Table 3-1. Form 1040ez booklet Table 3-1. Form 1040ez booklet Overview of the Rules for Claiming an Exemption for a Dependent Caution. Form 1040ez booklet This table is only an overview of the rules. Form 1040ez booklet For details, see the rest of this chapter. Form 1040ez booklet You cannot claim any dependents if you (or your spouse, if filing jointly) could be claimed as a dependent by another taxpayer. Form 1040ez booklet   You cannot claim a married person who files a joint return as a dependent unless that joint return is filed only to claim a refund of withheld income tax or estimated tax paid. Form 1040ez booklet   You cannot claim a person as a dependent unless that person is a U. Form 1040ez booklet S. Form 1040ez booklet citizen, U. Form 1040ez booklet S. Form 1040ez booklet resident alien, U. Form 1040ez booklet S. Form 1040ez booklet national, or a resident of Canada or Mexico. Form 1040ez booklet 1  You cannot claim a person as a dependent unless that person is your qualifying child or qualifying relative. Form 1040ez booklet   Tests To Be a Qualifying Child   Tests To Be a Qualifying Relative The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. Form 1040ez booklet   The child must be (a) under age 19 at the end of the year and younger than you (or your spouse, if filing jointly), (b) under age 24 at the end of the year, a student, and younger than you (or your spouse, if filing jointly), or (c) any age if permanently and totally disabled. Form 1040ez booklet   The child must have lived with you for more than half of the year. Form 1040ez booklet 2  The child must not have provided more than half of his or her own support for the year. Form 1040ez booklet   The child is not filing a joint return for the year (unless that return is filed only to get a refund of income tax withheld or estimated tax paid). Form 1040ez booklet  If the child meets the rules to be a qualifying child of more than one person, only one person can actually treat the child as a qualifying child. Form 1040ez booklet See the Special Rule for Qualifying Child of More Than One Person to find out which person is the person entitled to claim the child as a qualifying child. Form 1040ez booklet   The person cannot be your qualifying child or the qualifying child of any other taxpayer. Form 1040ez booklet   The person either (a) must be related to you in one of the ways listed under Relatives who do not have to live with you , or (b) must live with you all year as a member of your household2 (and your relationship must not violate local law). Form 1040ez booklet   The person's gross income for the year must be less than $3,900. Form 1040ez booklet 3  You must provide more than half of the person's total support for the year. Form 1040ez booklet 4  1There is an exception for certain adopted children. Form 1040ez booklet 2There are exceptions for temporary absences, children who were born or died during the year, children of divorced or separated parents (or parents who live apart), and kidnapped children. Form 1040ez booklet 3There is an exception if the person is disabled and has income from a sheltered workshop. Form 1040ez booklet 4There are exceptions for multiple support agreements, children of divorced or separated parents (or parents who live apart), and kidnapped children. Form 1040ez booklet Dependent not allowed a personal exemption. Form 1040ez booklet If you can claim an exemption for your dependent, the dependent cannot claim his or her own personal exemption on his or her own tax return. Form 1040ez booklet This is true even if you do not claim the dependent's exemption on your return. Form 1040ez booklet It is also true if the dependent's exemption on your return is reduced or eliminated under the phaseout rule described under Phaseout of Exemptions, later. Form 1040ez booklet Housekeepers, maids, or servants. Form 1040ez booklet   If these people work for you, you cannot claim exemptions for them. Form 1040ez booklet Child tax credit. Form 1040ez booklet   You may be entitled to a child tax credit for each qualifying child who was under age 17 at the end of the year if you claimed an exemption for that child. Form 1040ez booklet For more information, see chapter 34. Form 1040ez booklet Dependent Taxpayer Test If you can be claimed as a dependent by another person, you cannot claim anyone else as a dependent. Form 1040ez booklet Even if you have a qualifying child or qualifying relative, you cannot claim that person as a dependent. Form 1040ez booklet If you are filing a joint return and your spouse can be claimed as a dependent by someone else, you and your spouse cannot claim any dependents on your joint return. Form 1040ez booklet Joint Return Test You generally cannot claim a married person as a dependent if he or she files a joint return. Form 1040ez booklet Exception. Form 1040ez booklet   You can claim an exemption for a person who files a joint return if that person and his or her spouse file the joint return only to claim a refund of income tax withheld or estimated tax paid. Form 1040ez booklet Example 1—child files joint return. Form 1040ez booklet You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. Form 1040ez booklet He earned $25,000 for the year. Form 1040ez booklet The couple files a joint return. Form 1040ez booklet You cannot take an exemption for your daughter. Form 1040ez booklet Example 2—child files joint return only as claim for refund of withheld tax. Form 1040ez booklet Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. Form 1040ez booklet Neither is required to file a tax return. Form 1040ez booklet They do not have a child. Form 1040ez booklet Taxes were taken out of their pay so they filed a joint return only to get a refund of the withheld taxes. Form 1040ez booklet The exception to the joint return test applies, so you are not disqualified from claiming an exemption for each of them just because they file a joint return. Form 1040ez booklet You can claim exemptions for each of them if all the other tests to do so are met. Form 1040ez booklet Example 3—child files joint return to claim American opportunity credit. Form 1040ez booklet The facts are the same as in Example 2 except no taxes were taken out of your son's pay. Form 1040ez booklet He and his wife are not required to file a tax return. Form 1040ez booklet However, they file a joint return to claim an American opportunity credit of $124 and get a refund of that amount. Form 1040ez booklet Because claiming the American opportunity credit is their reason for filing the return, they are not filing it only to get a refund of income tax withheld or estimated tax paid. Form 1040ez booklet The exception to the joint return test does not apply, so you cannot claim an exemption for either of them. Form 1040ez booklet Citizen or Resident Test You cannot claim a person as a dependent unless that person is a U. Form 1040ez booklet S. Form 1040ez booklet citizen, U. Form 1040ez booklet S. Form 1040ez booklet resident alien, U. Form 1040ez booklet S. Form 1040ez booklet national, or a resident of Canada or Mexico. Form 1040ez booklet However, there is an exception for certain adopted children, as explained next. Form 1040ez booklet Exception for adopted child. Form 1040ez booklet   If you are a U. Form 1040ez booklet S. Form 1040ez booklet citizen or U. Form 1040ez booklet S. Form 1040ez booklet national who has legally adopted a child who is not a U. Form 1040ez booklet S. Form 1040ez booklet citizen, U. Form 1040ez booklet S. Form 1040ez booklet resident alien, or U. Form 1040ez booklet S. Form 1040ez booklet national, this test is met if the child lived with you as a member of your household all year. Form 1040ez booklet This exception also applies if the child was lawfully placed with you for legal adoption. Form 1040ez booklet Child's place of residence. Form 1040ez booklet   Children usually are citizens or residents of the country of their parents. Form 1040ez booklet   If you were a U. Form 1040ez booklet S. Form 1040ez booklet citizen when your child was born, the child may be a U. Form 1040ez booklet S. Form 1040ez booklet citizen and meet this test even if the other parent was a nonresident alien and the child was born in a foreign country. Form 1040ez booklet Foreign students' place of residence. Form 1040ez booklet   Foreign students brought to this country under a qualified international education exchange program and placed in American homes for a temporary period generally are not U. Form 1040ez booklet S. Form 1040ez booklet residents and do not meet this test. Form 1040ez booklet You cannot claim an exemption for them. Form 1040ez booklet However, if you provided a home for a foreign student, you may be able to take a charitable contribution deduction. Form 1040ez booklet See Expenses Paid for Student Living With You in chapter 24. Form 1040ez booklet U. Form 1040ez booklet S. Form 1040ez booklet national. Form 1040ez booklet   A U. Form 1040ez booklet S. Form 1040ez booklet national is an individual who, although not a U. Form 1040ez booklet S. Form 1040ez booklet citizen, owes his or her allegiance to the United States. Form 1040ez booklet U. Form 1040ez booklet S. Form 1040ez booklet nationals include American Samoans and Northern Mariana Islanders who chose to become U. Form 1040ez booklet S. Form 1040ez booklet nationals instead of U. Form 1040ez booklet S. Form 1040ez booklet citizens. Form 1040ez booklet Qualifying Child Five tests must be met for a child to be your qualifying child. Form 1040ez booklet The five tests are: Relationship, Age, Residency, Support, and Joint return. Form 1040ez booklet These tests are explained next. Form 1040ez booklet If a child meets the five tests to be the qualifying child of more than one person, a special rule applies to determine which person can actually treat the child as a qualifying child. Form 1040ez booklet See Special Rule for Qualifying Child of More Than One Person, later. Form 1040ez booklet Relationship Test To meet this test, a child must be: Your son, daughter, stepchild, foster child, or a descendant (for example, your grandchild) of any of them, or Your brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant (for example, your niece or nephew) of any of them. Form 1040ez booklet Adopted child. Form 1040ez booklet   An adopted child is always treated as your own child. Form 1040ez booklet The term “adopted child” includes a child who was lawfully placed with you for legal adoption. Form 1040ez booklet Foster child. Form 1040ez booklet   A foster child is an individual who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. Form 1040ez booklet Age Test To meet this test, a child must be: Under age 19 at the end of the year and younger than you (or your spouse, if filing jointly), A student under age 24 at the end of the year and younger than you (or your spouse, if filing jointly), or Permanently and totally disabled at any time during the year, regardless of age. Form 1040ez booklet Example. Form 1040ez booklet Your son turned 19 on December 10. Form 1040ez booklet Unless he was permanently and totally disabled or a student, he does not meet the age test because, at the end of the year, he was not under age 19. Form 1040ez booklet Child must be younger than you or spouse. Form 1040ez booklet   To be your qualifying child, a child who is not permanently and totally disabled must be younger than you. Form 1040ez booklet However, if you are married filing jointly, the child must be younger than you or your spouse but does not have to be younger than both of you. Form 1040ez booklet Example 1—child not younger than you or spouse. Form 1040ez booklet Your 23-year-old brother, who is a student and unmarried, lives with you and your spouse. Form 1040ez booklet He is not disabled. Form 1040ez booklet Both you and your spouse are 21 years old, and you file a joint return. Form 1040ez booklet Your brother is not your qualifying child because he is not younger than you or your spouse. Form 1040ez booklet Example 2—child younger than your spouse but not younger than you. Form 1040ez booklet The facts are the same as in Example 1 except your spouse is 25 years old. Form 1040ez booklet Because your brother is younger than your spouse, and you and your spouse are filing a joint return, your brother is your qualifying child, even though he is not younger than you. Form 1040ez booklet Student defined. Form 1040ez booklet   To qualify as a student, your child must be, during some part of each of any 5 calendar months of the year: A full-time student at a school that has a regular teaching staff, course of study, and a regularly enrolled student body at the school, or A student taking a full-time, on-farm training course given by a school described in (1), or by a state, county, or local government agency. Form 1040ez booklet The 5 calendar months do not have to be consecutive. Form 1040ez booklet Full-time student. Form 1040ez booklet   A full-time student is a student who is enrolled for the number of hours or courses the school considers to be full-time attendance. Form 1040ez booklet School defined. Form 1040ez booklet   A school can be an elementary school, junior or senior high school, college, university, or technical, trade, or mechanical school. Form 1040ez booklet However, an on-the-job training course, correspondence school, or school offering courses only through the Internet does not count as a school. Form 1040ez booklet Vocational high school students. Form 1040ez booklet   Students who work on “co-op” jobs in private industry as a part of a school's regular course of classroom and practical training are considered full-time students. Form 1040ez booklet Permanently and totally disabled. Form 1040ez booklet   Your child is permanently and totally disabled if both of the following apply. Form 1040ez booklet He or she cannot engage in any substantial gainful activity because of a physical or mental condition. Form 1040ez booklet A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death. Form 1040ez booklet Residency Test To meet this test, your child must have lived with you for more than half the year. Form 1040ez booklet There are exceptions for temporary absences, children who were born or died during the year, kidnapped children, and children of divorced or separated parents. Form 1040ez booklet Temporary absences. Form 1040ez booklet   Your child is considered to have lived with you during periods of time when one of you, or both, are temporarily absent due to special circumstances such as: Illness, Education, Business, Vacation, or Military service. Form 1040ez booklet Your child is also considered to have lived with you during any required hospital stay following birth, as long as the child would have lived with you during that time but for the hospitalization. Form 1040ez booklet Death or birth of child. Form 1040ez booklet   A child who was born or died during the year is treated as having lived with you more than half of the year if your home was the child's home more than half of the time he or she was alive during the year. Form 1040ez booklet Child born alive. Form 1040ez booklet   You may be able to claim an exemption for a child born alive during the year, even if the child lived only for a moment. Form 1040ez booklet State or local law must treat the child as having been born alive. Form 1040ez booklet There must be proof of a live birth shown by an official document, such as a birth certificate. Form 1040ez booklet The child must be your qualifying child or qualifying relative, and all the other tests to claim an exemption for a dependent must be met. Form 1040ez booklet Stillborn child. Form 1040ez booklet   You cannot claim an exemption for a stillborn child. Form 1040ez booklet Kidnapped child. Form 1040ez booklet   You may be able to treat your child as meeting the residency test even if the child has been kidnapped. Form 1040ez booklet See Publication 501 for details. Form 1040ez booklet Children of divorced or separated parents (or parents who live apart). Form 1040ez booklet   In most cases, because of the residency test, a child of divorced or separated parents is the qualifying child of the custodial parent. Form 1040ez booklet However, the child will be treated as the qualifying child of the noncustodial parent if all four of the following statements are true. Form 1040ez booklet The parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Lived apart at all times during the last 6 months of the year, whether or not they are or were married. Form 1040ez booklet The child received over half of his or her support for the year from the parents. Form 1040ez booklet The child is in the custody of one or both parents for more than half of the year. Form 1040ez booklet Either of the following statements is true. Form 1040ez booklet The custodial parent signs a written declaration, discussed later, that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches this written declaration to his or her return. Form 1040ez booklet (If the decree or agreement went into effect after 1984 and before 2009, see Post-1984 and pre-2009 divorce decree or separation agreement , later. Form 1040ez booklet If the decree or agreement went into effect after 2008, see Post-2008 divorce decree or separation agreement , later. Form 1040ez booklet ) A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2013 states that the noncustodial parent can claim the child as a dependent, the decree or agreement was not changed after 1984 to say the noncustodial parent cannot claim the child as a dependent, and the noncustodial parent provides at least $600 for the child's support during the year. Form 1040ez booklet Custodial parent and noncustodial parent. Form 1040ez booklet   The custodial parent is the parent with whom the child lived for the greater number of nights during the year. Form 1040ez booklet The other parent is the noncustodial parent. Form 1040ez booklet   If the parents divorced or separated during the year and the child lived with both parents before the separation, the custodial parent is the one with whom the child lived for the greater number of nights during the rest of the year. Form 1040ez booklet   A child is treated as living with a parent for a night if the child sleeps: At that parent's home, whether or not the parent is present, or In the company of the parent, when the child does not sleep at a parent's home (for example, the parent and child are on vacation together). Form 1040ez booklet Equal number of nights. Form 1040ez booklet   If the child lived with each parent for an equal number of nights during the year, the custodial parent is the parent with the higher adjusted gross income (AGI). Form 1040ez booklet December 31. Form 1040ez booklet   The night of December 31 is treated as part of the year in which it begins. Form 1040ez booklet For example, December 31, 2013, is treated as part of 2013. Form 1040ez booklet Emancipated child. Form 1040ez booklet   If a child is emancipated under state law, the child is treated as not living with either parent. Form 1040ez booklet See Examples 5 and 6. Form 1040ez booklet Absences. Form 1040ez booklet   If a child was not with either parent on a particular night (because, for example, the child was staying at a friend's house), the child is treated as living with the parent with whom the child normally would have lived for that night, except for the absence. Form 1040ez booklet But if it cannot be determined with which parent the child normally would have lived or if the child would not have lived with either parent that night, the child is treated as not living with either parent that night. Form 1040ez booklet Parent works at night. Form 1040ez booklet   If, due to a parent's nighttime work schedule, a child lives for a greater number of days, but not nights, with the parent who works at night, that parent is treated as the custodial parent. Form 1040ez booklet On a school day, the child is treated as living at the primary residence registered with the school. Form 1040ez booklet Example 1—child lived with one parent for a greater number of nights. Form 1040ez booklet You and your child’s other parent are divorced. Form 1040ez booklet In 2013, your child lived with you 210 nights and with the other parent 155 nights. Form 1040ez booklet You are the custodial parent. Form 1040ez booklet Example 2—child is away at camp. Form 1040ez booklet In 2013, your daughter lives with each parent for alternate weeks. Form 1040ez booklet In the summer, she spends 6 weeks at summer camp. Form 1040ez booklet During the time she is at camp, she is treated as living with you for 3 weeks and with her other parent, your ex-spouse, for 3 weeks because this is how long she would have lived with each parent if she had not attended summer camp. Form 1040ez booklet Example 3—child lived same number of nights with each parent. Form 1040ez booklet Your son lived with you 180 nights during the year and lived the same number of nights with his other parent, your ex-spouse. Form 1040ez booklet Your AGI is $40,000. Form 1040ez booklet Your ex-spouse's AGI is $25,000. Form 1040ez booklet You are treated as your son's custodial parent because you have the higher AGI. Form 1040ez booklet Example 4—child is at parent’s home but with other parent. Form 1040ez booklet Your son normally lives with you during the week and with his other parent, your ex-spouse, every other weekend. Form 1040ez booklet You become ill and are hospitalized. Form 1040ez booklet The other parent lives in your home with your son for 10 consecutive days while you are in the hospital. Form 1040ez booklet Your son is treated as living with you during this 10-day period because he was living in your home. Form 1040ez booklet Example 5—child emancipated in May. Form 1040ez booklet When your son turned age 18 in May 2013, he became emancipated under the law of the state where he lives. Form 1040ez booklet As a result, he is not considered in the custody of his parents for more than half of the year. Form 1040ez booklet The special rule for children of divorced or separated parents does not apply. Form 1040ez booklet Example 6—child emancipated in August. Form 1040ez booklet Your daughter lives with you from January 1, 2013, until May 31, 2013, and lives with her other parent, your ex-spouse, from June 1, 2013, through the end of the year. Form 1040ez booklet She turns 18 and is emancipated under state law on August 1, 2013. Form 1040ez booklet Because she is treated as not living with either parent beginning on August 1, she is treated as living with you the greater number of nights in 2013. Form 1040ez booklet You are the custodial parent. Form 1040ez booklet Written declaration. Form 1040ez booklet    The custodial parent may use either Form 8332 or a similar statement (containing the same information required by the form) to make the written declaration to release the exemption to the noncustodial parent. Form 1040ez booklet The noncustodial parent must attach a copy of the form or statement to his or her tax return. Form 1040ez booklet   The exemption can be released for 1 year, for a number of specified years (for example, alternate years), or for all future years, as specified in the declaration. Form 1040ez booklet Post-1984 and pre-2009 divorce decree or separation agreement. Form 1040ez booklet   If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree or agreement instead of Form 8332. Form 1040ez booklet The decree or agreement must state all three of the following. Form 1040ez booklet The noncustodial parent can claim the child as a dependent without regard to any condition, such as payment of support. Form 1040ez booklet The custodial parent will not claim the child as a dependent for the year. Form 1040ez booklet The years for which the noncustodial parent, rather than the custodial parent, can claim the child as a dependent. Form 1040ez booklet   The noncustodial parent must attach all of the following pages of the decree or agreement to his or her tax return. Form 1040ez booklet The cover page (write the other parent's social security number on this page). Form 1040ez booklet The pages that include all of the information identified in items (1) through (3) above. Form 1040ez booklet The signature page with the other parent's signature and the date of the agreement. Form 1040ez booklet Post-2008 divorce decree or separation agreement. Form 1040ez booklet   The noncustodial parent cannot attach pages from the decree or agreement instead of Form 8332 if the decree or agreement went into effect after 2008. Form 1040ez booklet The custodial parent must sign either Form 8332 or a similar statement whose only purpose is to release the custodial parent's claim to an exemption for a child, and the noncustodial parent must attach a copy to his or her return. Form 1040ez booklet The form or statement must release the custodial parent's claim to the child without any conditions. Form 1040ez booklet For example, the release must not depend on the noncustodial parent paying support. Form 1040ez booklet    The noncustodial parent must attach the required information even if it was filed with a return in an earlier year. Form 1040ez booklet Revocation of release of claim to an exemption. Form 1040ez booklet   The custodial parent can revoke a release of claim to exemption that he or she previously released to the noncustodial parent on Form 8332 (or a similar statement). Form 1040ez booklet For the revocation to be effective for 2013, the custodial parent must have given (or made reasonable efforts to give) written notice of the revocation to the noncustodial parent in 2012 or earlier. Form 1040ez booklet The custodial parent can use Part III of Form 8332 for this purpose and must attach a copy of the revocation to his or her return for each tax year he or she claims the child as a dependent as a result of the revocation. Form 1040ez booklet Remarried parent. Form 1040ez booklet   If you remarry, the support provided by your new spouse is treated as provided by you. Form 1040ez booklet Parents who never married. Form 1040ez booklet   This special rule for divorced or separated parents also applies to parents who never married, and who lived apart at all times during the last 6 months of the year. Form 1040ez booklet Support Test (To Be a Qualifying Child) To meet this test, the child cannot have provided more than half of his or her own support for the year. Form 1040ez booklet This test is different from the support test to be a qualifying relative, which is described later. Form 1040ez booklet However, to see what is or is not support, see Support Test (To Be a Qualifying Relative) , later. Form 1040ez booklet If you are not sure whether a child provided more than half of his or her own support, you may find Worksheet 3-1 helpful. Form 1040ez booklet Worksheet 3-1. Form 1040ez booklet Worksheet for Determining Support Funds Belonging to the Person You Supported       1. Form 1040ez booklet Enter the total funds belonging to the person you supported, including income received (taxable and nontaxable) and amounts borrowed during the year, plus the amount in savings and other accounts at the beginning of the year. Form 1040ez booklet Do not include funds provided by the state; include those amounts on line 23 instead 1. Form 1040ez booklet     2. Form 1040ez booklet Enter the amount on line 1 that was used for the person's support 2. Form 1040ez booklet     3. Form 1040ez booklet Enter the amount on line 1 that was used for other purposes 3. Form 1040ez booklet     4. Form 1040ez booklet Enter the total amount in the person's savings and other accounts at the end of the year 4. Form 1040ez booklet     5. Form 1040ez booklet Add lines 2 through 4. Form 1040ez booklet (This amount should equal line 1. Form 1040ez booklet ) 5. Form 1040ez booklet     Expenses for Entire Household (where the person you supported lived)       6. Form 1040ez booklet Lodging (complete line 6a or 6b):         a. Form 1040ez booklet Enter the total rent paid 6a. Form 1040ez booklet       b. Form 1040ez booklet Enter the fair rental value of the home. Form 1040ez booklet If the person you supported owned the home,  also include this amount in line 21 6b. Form 1040ez booklet     7. Form 1040ez booklet Enter the total food expenses 7. Form 1040ez booklet     8. Form 1040ez booklet Enter the total amount of utilities (heat, light, water, etc. Form 1040ez booklet not included in line 6a or 6b) 8. Form 1040ez booklet     9. Form 1040ez booklet Enter the total amount of repairs (not included in line 6a or 6b) 9. Form 1040ez booklet     10. Form 1040ez booklet Enter the total of other expenses. Form 1040ez booklet Do not include expenses of maintaining the home, such as mortgage interest, real estate taxes, and insurance 10. Form 1040ez booklet     11. Form 1040ez booklet Add lines 6a through 10. Form 1040ez booklet These are the total household expenses 11. Form 1040ez booklet     12. Form 1040ez booklet Enter total number of persons who lived in the household 12. Form 1040ez booklet     Expenses for the Person You Supported       13. Form 1040ez booklet Divide line 11 by line 12. Form 1040ez booklet This is the person's share of the household expenses 13. Form 1040ez booklet     14. Form 1040ez booklet Enter the person's total clothing expenses 14. Form 1040ez booklet     15. Form 1040ez booklet Enter the person's total education expenses 15. Form 1040ez booklet     16. Form 1040ez booklet Enter the person's total medical and dental expenses not paid for or reimbursed by insurance 16. Form 1040ez booklet     17. Form 1040ez booklet Enter the person's total travel and recreation expenses 17. Form 1040ez booklet     18. Form 1040ez booklet Enter the total of the person's other expenses 18. Form 1040ez booklet     19. Form 1040ez booklet Add lines 13 through 18. Form 1040ez booklet This is the total cost of the person's support for the year 19. Form 1040ez booklet     Did the Person Provide More Than Half of His or Her Own Support?       20. Form 1040ez booklet Multiply line 19 by 50% (. Form 1040ez booklet 50) 20. Form 1040ez booklet     21. Form 1040ez booklet Enter the amount from line 2, plus the amount from line 6b if the person you supported owned  the home. Form 1040ez booklet This is the amount the person provided for his or her own support 21. Form 1040ez booklet     22. Form 1040ez booklet Is line 21 more than line 20?   No. Form 1040ez booklet You meet the support test for this person to be your qualifying child. Form 1040ez booklet If this person also meets the other tests to be a qualifying child, stop here; do not complete lines 23–26. Form 1040ez booklet Otherwise, go to line 23 and fill out the rest of the worksheet to determine if this person is your qualifying relative. Form 1040ez booklet    Yes. Form 1040ez booklet You do not meet the support test for this person to be either your qualifying child or your qualifying relative. Form 1040ez booklet Stop here. Form 1040ez booklet        Did You Provide More Than Half?       23. Form 1040ez booklet Enter the amount others provided for the person's support. Form 1040ez booklet Include amounts provided by state, local, and other welfare societies or agencies. Form 1040ez booklet Do not include any amounts included on line 1 23. Form 1040ez booklet     24. Form 1040ez booklet Add lines 21 and 23 24. Form 1040ez booklet     25. Form 1040ez booklet Subtract line 24 from line 19. Form 1040ez booklet This is the amount you provided for the person's support 25. Form 1040ez booklet     26. Form 1040ez booklet Is line 25 more than line 20?   Yes. Form 1040ez booklet You meet the support test for this person to be your qualifying relative. Form 1040ez booklet    No. Form 1040ez booklet You do not meet the support test for this person to be your qualifying relative. Form 1040ez booklet You cannot claim an exemption for this person unless you can do so under a multiple support agreement, the support test for children of divorced or separated parents, or the special rule for kidnapped children. Form 1040ez booklet See Multiple Support Agreement or Support Test for Children of Divorced or Separated Parents (or Parents Who Live Apart) , or Kidnapped child under Qualifying Relative. Form 1040ez booklet   Example. Form 1040ez booklet You provided $4,000 toward your 16-year-old son's support for the year. Form 1040ez booklet He has a part-time job and provided $6,000 to his own support. Form 1040ez booklet He provided more than half of his own support for the year. Form 1040ez booklet He is not your qualifying child. Form 1040ez booklet Foster care payments and expenses. Form 1040ez booklet   Payments you receive for the support of a foster child from a child placement agency are considered support provided by the agency. Form 1040ez booklet Similarly, payments you receive for the support of a foster child from a state or county are considered support provided by the state or county. Form 1040ez booklet   If you are not in the trade or business of providing foster care and your unreimbursed out-of-pocket expenses in caring for a foster child were mainly to benefit an organization qualified to receive deductible charitable contributions, the expenses are deductible as charitable contributions but are not considered support you provided. Form 1040ez booklet For more information about the deduction for charitable contributions, see chapter 24. Form 1040ez booklet If your unreimbursed expenses are not deductible as charitable contributions, they may qualify as support you provided. Form 1040ez booklet   If you are in the trade or business of providing foster care, your unreimbursed expenses are not considered support provided by you. Form 1040ez booklet Example 1. Form 1040ez booklet Lauren, a foster child, lived with Mr. Form 1040ez booklet and Mrs. Form 1040ez booklet Smith for the last 3 months of the year. Form 1040ez booklet The Smiths cared for Lauren because they wanted to adopt her (although she had not been placed with them for adoption). Form 1040ez booklet They did not care for her as a trade or business or to benefit the agency that placed her in their home. Form 1040ez booklet The Smiths' unreimbursed expenses are not deductible as charitable contributions but are considered support they provided for Lauren. Form 1040ez booklet Example 2. Form 1040ez booklet You provided $3,000 toward your 10-year-old foster child's support for the year. Form 1040ez booklet The state government provided $4,000, which is considered support provided by the state, not by the child. Form 1040ez booklet See Support provided by the state (welfare, food stamps, housing, etc. Form 1040ez booklet ) , later. Form 1040ez booklet Your foster child did not provide more than half of her own support for the year. Form 1040ez booklet Scholarships. Form 1040ez booklet   A scholarship received by a child who is a student is not taken into account in determining whether the child provided more than half of his or her own support. Form 1040ez booklet Joint Return Test (To Be a Qualifying Child) To meet this test, the child cannot file a joint return for the year. Form 1040ez booklet Exception. Form 1040ez booklet   An exception to the joint return test applies if your child and his or her spouse file a joint return only to claim a refund of income tax withheld or estimated tax paid. Form 1040ez booklet Example 1—child files joint return. Form 1040ez booklet You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. Form 1040ez booklet He earned $25,000 for the year. Form 1040ez booklet The couple files a joint return. Form 1040ez booklet Because your daughter and her husband file a joint return, she is not your qualifying child. Form 1040ez booklet Example 2—child files joint return only as a claim for refund of withheld tax. Form 1040ez booklet Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. Form 1040ez booklet Neither is required to file a tax return. Form 1040ez booklet They do not have a child. Form 1040ez booklet Taxes were taken out of their pay so they filed a joint return only to get a refund of the withheld taxes. Form 1040ez booklet The exception to the joint return test applies, so your son may be your qualifying child if all the other tests are met. Form 1040ez booklet Example 3—child files joint return to claim American opportunity credit. Form 1040ez booklet The facts are the same as in Example 2 except no taxes were taken out of your son's pay. Form 1040ez booklet He and his wife were not required to file a tax return. Form 1040ez booklet However, they file a joint return to claim an American opportunity credit of $124 and get a refund of that amount. Form 1040ez booklet Because claiming the American opportunity credit is their reason for filing the return, they are not filing it only to get a refund of income tax withheld or estimated tax paid. Form 1040ez booklet The exception to the joint return test does not apply, so your son is not your qualifying child. Form 1040ez booklet Special Rule for Qualifying Child of More Than One Person If your qualifying child is not a qualifying child of anyone else, this special rule does not apply to you and you do not need to read about it. Form 1040ez booklet This is also true if your qualifying child is not a qualifying child of anyone else except your spouse with whom you file a joint return. Form 1040ez booklet If a child is treated as the qualifying child of the noncustodial parent under the rules for children of divorced or separated parents (or parents who live apart) described earlier, see Applying this special rule to divorced or separated parents (or parents who live apart), later. Form 1040ez booklet Sometimes, a child meets the relationship, age, residency, support, and joint return tests to be a qualifying child of more than one person. Form 1040ez booklet Although the child is a qualifying child of each of these persons, only one person can actually treat the child as a qualifying child to take all of the following tax benefits (provided the person is eligible for each benefit). Form 1040ez booklet The exemption for the child. Form 1040ez booklet The child tax credit. Form 1040ez booklet Head of household filing status. Form 1040ez booklet The credit for child and dependent care expenses. Form 1040ez booklet The exclusion from income for dependent care benefits. Form 1040ez booklet The earned income credit. Form 1040ez booklet The other person cannot take any of these benefits based on this qualifying child. Form 1040ez booklet In other words, you and the other person cannot agree to divide these benefits between you. Form 1040ez booklet The other person cannot take any of these tax benefits for a child unless he or she has a different qualifying child. Form 1040ez booklet Tiebreaker rules. Form 1040ez booklet   To determine which person can treat the child as a qualifying child to claim these six tax benefits, the following tiebreaker rules apply. Form 1040ez booklet If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. Form 1040ez booklet If the parents file a joint return together and can claim the child as a qualifying child, the child is treated as the qualifying child of the parents. Form 1040ez booklet If the parents do not file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. Form 1040ez booklet If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year. Form 1040ez booklet If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year. Form 1040ez booklet If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person's AGI is higher than the highest AGI of any of the child's parents who can claim the child. Form 1040ez booklet If the child's parents file a joint return with each other, this rule can be applied by dividing the parents' combined AGI equally between the parents. Form 1040ez booklet See Example 6 . Form 1040ez booklet   Subject to these tiebreaker rules, you and the other person may be able to choose which of you claims the child as a qualifying child. Form 1040ez booklet Example 1—child lived with parent and grandparent. Form 1040ez booklet You and your 3-year-old daughter Jane lived with your mother all year. Form 1040ez booklet You are 25 years old, unmarried, and your AGI is $9,000. Form 1040ez booklet Your mother's AGI is $15,000. Form 1040ez booklet Jane's father did not live with you or your daughter. Form 1040ez booklet You have not signed Form 8332 (or a similar statement) to release the child's exemption to the noncustodial parent. Form 1040ez booklet Jane is a qualifying child of both you and your mother because she meets the relationship, age, residency, support, and joint return tests for both you and your mother. Form 1040ez booklet However, only one of you can claim her. Form 1040ez booklet Jane is not a qualifying child of anyone else, including her father. Form 1040ez booklet You agree to let your mother claim Jane. Form 1040ez booklet This means your mother can claim Jane as a qualifying child for all of the six tax benefits listed earlier, if she qualifies (and if you do not claim Jane as a qualifying child for any of those tax benefits). Form 1040ez booklet Example 2—parent has higher AGI than grandparent. Form 1040ez booklet The facts are the same as in Example 1 except your AGI is $18,000. Form 1040ez booklet Because your mother's AGI is not higher than yours, she cannot claim Jane. Form 1040ez booklet Only you can claim Jane. Form 1040ez booklet Example 3—two persons claim same child. Form 1040ez booklet The facts are the same as in Example 1 except that you and your mother both claim Jane as a qualifying child. Form 1040ez booklet In this case, you, as the child's parent, will be the only one allowed to claim Jane as a qualifying child. Form 1040ez booklet The IRS will disallow your mother's claim to the six tax benefits listed earlier unless she has another qualifying child. Form 1040ez booklet Example 4—qualifying children split between two persons. Form 1040ez booklet The facts are the same as in Example 1 except you also have two other young children who are qualifying children of both you and your mother. Form 1040ez booklet Only one of you can claim each child. Form 1040ez booklet However, if your mother's AGI is higher than yours, you can allow your mother to claim one or more of the children. Form 1040ez booklet For example, if you claim one child, your mother can claim the other two. Form 1040ez booklet Example 5—taxpayer who is a qualifying child. Form 1040ez booklet The facts are the same as in Example 1 except you are only 18 years old and did not provide more than half of your own support for the year. Form 1040ez booklet This means you are your mother's qualifying child. Form 1040ez booklet If she can claim you as a dependent, then you cannot claim your daughter as a dependent because of the Dependent Taxpayer Test explained earlier. Form 1040ez booklet Example 6—child lived with both parents and grandparent. Form 1040ez booklet The facts are the same as in Example 1 except you are married to your daughter's father. Form 1040ez booklet The two of you live together with your daughter and your mother, and have an AGI of $20,000 on a joint return. Form 1040ez booklet If you and your husband do not claim your daughter as a qualifying child, your mother can claim her instead. Form 1040ez booklet Even though the AGI on your joint return, $20,000, is more than your mother's AGI of $15,000, for this purpose each parent's AGI can be treated as $10,000, so your mother's $15,000 AGI is treated as higher than the highest AGI of any of the child's parents who can claim the child. Form 1040ez booklet Example 7—separated parents. Form 1040ez booklet You, your husband, and your 10-year-old son lived together until August 1, 2013, when your husband moved out of the household. Form 1040ez booklet In August and September, your son lived with you. Form 1040ez booklet For the rest of the year, your son lived with your husband, the boy's father. Form 1040ez booklet Your son is a qualifying child of both you and your husband because your son lived with each of you for more than half the year and because he met the relationship, age, support, and joint return tests for both of you. Form 1040ez booklet At the end of the year, you and your husband still were not divorced, legally separated, or separated under a written separation agreement, so the rule for children of divorced or separated parents (or parents who live apart) does not apply. Form 1040ez booklet You and your husband will file separate returns. Form 1040ez booklet Your husband agrees to let you treat your son as a qualifying child. Form 1040ez booklet This means, if your husband does not claim your son as a qualifying child, you can claim your son as a qualifying child for the dependency exemption, child tax credit, and exclusion for dependent care benefits (if you qualify for each of those tax benefits). Form 1040ez booklet However, you cannot claim head of household filing status because you and your husband did not live apart for the last 6 months of the year. Form 1040ez booklet As a result, your filing status is married filing separately, so you cannot claim the earned income credit or the credit for child and dependent care expenses. Form 1040ez booklet Example 8—separated parents claim same child. Form 1040ez booklet The facts are the same as in Example 7 except that you and your husband both claim your son as a qualifying child. Form 1040ez booklet In this case, only your husband will be allowed to treat your son as a qualifying child. Form 1040ez booklet This is because, during 2013, the boy lived with him longer than with you. Form 1040ez booklet If you claimed an exemption or the child tax credit for your son, the IRS will disallow your claim to both these tax benefits. Form 1040ez booklet If you do not have another qualifying child or dependent, the IRS will also disallow your claim to the exclusion for dependent care benefits. Form 1040ez booklet In addition, because you and your husband did not live apart for the last 6 months of the year, your husband cannot claim head of household filing status. Form 1040ez booklet As a result, his filing status is married filing separately, so he cannot claim the earned income credit or the credit for child and dependent care expenses. Form 1040ez booklet Example 9—unmarried parents. Form 1040ez booklet You, your 5-year-old son, and your son's father lived together all year. Form 1040ez booklet You and your son's father are not married. Form 1040ez booklet Your son is a qualifying child of both you and his father because he meets the relationship, age, residency, support, and joint return tests for both you and his father. Form 1040ez booklet Your AGI is $12,000 and your son's father's AGI is $14,000. Form 1040ez booklet Your son's father agrees to let you claim the child as a qualifying child. Form 1040ez booklet This means you can claim him as a qualifying child for the dependency exemption, child tax credit, head of household filing status, credit for child and dependent care expenses, exclusion for dependent care benefits, and the earned income credit, if you qualify for each of those tax benefits (and if your son's father does not, in fact, claim your son as a qualifying child for any of those tax benefits). Form 1040ez booklet Example 10—unmarried parents claim same child. Form 1040ez booklet The facts are the same as in Example 9 except that you and your son's father both claim your son as a qualifying child. Form 1040ez booklet In this case, only your son's father will be allowed to treat your son as a qualifying child. Form 1040ez booklet This is because his AGI, $14,000, is more than your AGI, $12,000. Form 1040ez booklet If you claimed an exemption or the child tax credit for your son, the IRS will disallow your claim to both these tax benefits. Form 1040ez booklet If you do not have another qualifying child or dependent, the IRS will also disallow your claim to the earned income credit, head of household filing status, the credit for child and dependent care expenses, and the exclusion for dependent care benefits. Form 1040ez booklet Example 11—child did not live with a parent. Form 1040ez booklet You and your 7-year-old niece, your sister's child, lived with your mother all year. Form 1040ez booklet You are 25 years old, and your AGI is $9,300. Form 1040ez booklet Your mother's AGI is $15,000. Form 1040ez booklet Your niece's parents file jointly, have an AGI of less than $9,000, and do not live with you or their child. Form 1040ez booklet Your niece is a qualifying child of both you and your mother because she meets the relationship, age, residency, support, and joint return tests for both you and your mother. Form 1040ez booklet However, only your mother can treat her as a qualifying child. Form 1040ez booklet This is because your mother's AGI, $15,000, is more than your AGI, $9,300. Form 1040ez booklet Applying this special rule to divorced or separated parents (or parents who live apart). Form 1040ez booklet   If a child is treated as the qualifying child of the noncustodial parent under the rules described earlier for children of divorced or separated parents (or parents who live apart), only the noncustodial parent can claim an exemption and the child tax credit for the child. Form 1040ez booklet However, the custodial parent, if eligible, or other eligible person can claim the child as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, and the earned income credit. Form 1040ez booklet If the child is the qualifying child of more than one person for these benefits, then the tiebreaker rules just explained determine which person can treat the child as a qualifying child. Form 1040ez booklet Example 1. Form 1040ez booklet You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. Form 1040ez booklet Your AGI is $10,000. Form 1040ez booklet Your mother's AGI is $25,000. Form 1040ez booklet Your son's father did not live with you or your son. Form 1040ez booklet Under the rules explained earlier for children of divorced or separated parents (or parents who live apart), your son is treated as the qualifying child of his father, who can claim an exemption and the child tax credit for him. Form 1040ez booklet Because of this, you cannot claim an exemption or the child tax credit for your son. Form 1040ez booklet However, your son's father cannot claim your son as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, or the earned income credit. Form 1040ez booklet You and your mother did not have any child care expenses or dependent care benefits, so neither of you can claim the credit for child and dependent care expenses or the exclusion for dependent care benefits. Form 1040ez booklet But the boy is a qualifying child of both you and your mother for head of household filing status and the earned income credit because he meets the relationship, age, residency, support, and joint return tests for both you and your mother. Form 1040ez booklet (Note: The support test does not apply for the earned income credit. Form 1040ez booklet ) However, you agree to let your mother claim your son. Form 1040ez booklet This means she can claim him for head of household filing status and the earned income credit if she qualifies for each and if you do not claim him as a qualifying child for the earned income credit. Form 1040ez booklet (You cannot claim head of household filing status because your mother paid the entire cost of keeping up the home. Form 1040ez booklet ) Example 2. Form 1040ez booklet The facts are the same as in Example 1 except your AGI is $25,000 and your mother's AGI is $21,000. Form 1040ez booklet Your mother cannot claim your son as a qualifying child for any purpose because her AGI is not higher than yours. Form 1040ez booklet Example 3. Form 1040ez booklet The facts are the same as in Example 1 except you and your mother both claim your son as a qualifying child for the earned income credit. Form 1040ez booklet Your mother also claims him as a qualifying child for head of household filing status. Form 1040ez booklet You, as the child's parent, will be the only one allowed to claim your son as a qualifying child for the earned income credit. Form 1040ez booklet The IRS will disallow your mother's claim to the earned income credit and head of household filing status unless she has another qualifying child. Form 1040ez booklet Qualifying Relative Four tests must be met for a person to be your qualifying relative. Form 1040ez booklet The four tests are: Not a qualifying child test, Member of household or relationship test, Gross income test, and Support test. Form 1040ez booklet Age. Form 1040ez booklet   Unlike a qualifying child, a qualifying relative can be any age. Form 1040ez booklet There is no age test for a qualifying relative. Form 1040ez booklet Kidnapped child. Form 1040ez booklet   You may be able to treat a child as your qualifying relative even if the child has been kidnapped. Form 1040ez booklet See Publication 501 for details. Form 1040ez booklet Not a Qualifying Child Test A child is not your qualifying relative if the child is your qualifying child or the qualifying child of any other taxpayer. Form 1040ez booklet Example 1. Form 1040ez booklet Your 22-year-old daughter, who is a student, lives with you and meets all the tests to be your qualifying child. Form 1040ez booklet She is not your qualifying relative. Form 1040ez booklet Example 2. Form 1040ez booklet Your 2-year-old son lives with your parents and meets all the tests to be their qualifying child. Form 1040ez booklet He is not your qualifying relative. Form 1040ez booklet Example 3. Form 1040ez booklet Your son lives with you but is not your qualifying child because he is 30 years old and does not meet the age test. Form 1040ez booklet He may be your qualifying relative if the gross income test and the support test are met. Form 1040ez booklet Example 4. Form 1040ez booklet Your 13-year-old grandson lived with his mother for 3 months, with his uncle for 4 months, and with you for 5 months during the year. Form 1040ez booklet He is not your qualifying child because he does not meet the residency test. Form 1040ez booklet He may be your qualifying relative if the gross income test and the support test are met. Form 1040ez booklet Child of person not required to file a return. Form 1040ez booklet   A child is not the qualifying child of any other taxpayer and so may qualify as your qualifying relative if the child's parent (or other person for whom the child is defined as a qualifying child) is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. Form 1040ez booklet Example 1—return not required. Form 1040ez booklet You support an unrelated friend and her 3-year-old child, who lived with you all year in your home. Form 1040ez booklet Your friend has no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Form 1040ez booklet Both your friend and her child are your qualifying relatives if the support test is met. Form 1040ez booklet Example 2—return filed to claim refund. Form 1040ez booklet The facts are the same as in Example 1 except your friend had wages of $1,500 during the year and had income tax withheld from her wages. Form 1040ez booklet She files a return only to get a refund of the income tax withheld and does not claim the earned income credit or any other tax credits or deductions. Form 1040ez booklet Both your friend and her child are your qualifying relatives if the support test is met. Form 1040ez booklet Example 3—earned income credit claimed. Form 1040ez booklet The facts are the same as in Example 2 except your friend had wages of $8,000 during the year and claimed the earned income credit on her return. Form 1040ez booklet Your friend's child is the qualifying child of another taxpayer (your friend), so you cannot claim your friend's child as your qualifying relative. Form 1040ez booklet Child in Canada or Mexico. Form 1040ez booklet   You may be able to claim your child as a dependent even if the child lives in Canada or Mexico. Form 1040ez booklet If the child does not live with you, the child does not meet the residency test to be your qualifying child. Form 1040ez booklet However, the child may still be your qualifying relative. Form 1040ez booklet If the persons the child does live with are not U. Form 1040ez booklet S. Form 1040ez booklet citizens and have no U. Form 1040ez booklet S. Form 1040ez booklet gross income, those persons are not “taxpayers,” so the child is not the qualifying child of any other taxpayer. Form 1040ez booklet If the child is not the qualifying child of any other taxpayer, the child is your qualifying relative as long as the gross income test and the support test are met. Form 1040ez booklet   You cannot claim as a dependent a child who lives in a foreign country other than Canada or Mexico, unless the child is a U. Form 1040ez booklet S. Form 1040ez booklet citizen, U. Form 1040ez booklet S. Form 1040ez booklet resident alien, or U. Form 1040ez booklet S. Form 1040ez booklet national. Form 1040ez booklet There is an exception for certain adopted children who lived with you all year. Form 1040ez booklet See Citizen or Resident Test , earlier. Form 1040ez booklet Example. Form 1040ez booklet You provide all the support of your children, ages 6, 8, and 12, who live in Mexico with your mother and have no income. Form 1040ez booklet You are single and live in the United States. Form 1040ez booklet Your mother is not a U. Form 1040ez booklet S. Form 1040ez booklet citizen and has no U. Form 1040ez booklet S. Form 1040ez booklet income, so she is not a “taxpayer. Form 1040ez booklet ” Your children are not your qualifying children because they do not meet the residency test. Form 1040ez booklet But since they are not the qualifying children of any other taxpayer, they are your qualifying relatives and you can claim them as dependents. Form 1040ez booklet You may also be able to claim your mother as a dependent if the gross income and support tests are met. Form 1040ez booklet Member of Household or Relationship Test To meet this test, a person must either: Live with you all year as a member of your household, or Be related to you in one of the ways listed under Relatives who do not have to live with you . Form 1040ez booklet If at any time during the year the person was your spouse, that person cannot be your qualifying relative. Form 1040ez booklet However, see Personal Exemptions , earlier. Form 1040ez booklet Relatives who do not have to live with you. Form 1040ez booklet   A person related to you in any of the following ways does not have to live with you all year as a member of your household to meet this test. Form 1040ez booklet Your child, stepchild, foster child, or a descendant of any of them (for example, your grandchild). Form 1040ez booklet (A legally adopted child is considered your child. Form 1040ez booklet ) Your brother, sister, half brother, half sister, stepbrother, or stepsister. Form 1040ez booklet Your father, mother, grandparent, or other direct ancestor, but not foster parent. Form 1040ez booklet Your stepfather or stepmother. Form 1040ez booklet A son or daughter of your brother or sister. Form 1040ez booklet A son or daughter of your half brother or half sister. Form 1040ez booklet A brother or sister of your father or mother. Form 1040ez booklet Your son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law. Form 1040ez booklet Any of these relationships that were established by marriage are not ended by death or divorce. Form 1040ez booklet Example. Form 1040ez booklet You and your wife began supporting your wife's father, a widower, in 2006. Form 1040ez booklet Your wife died in 2012. Form 1040ez booklet Despite your wife's death, your father-in-law continues to meet this test, even if he does not live with you. Form 1040ez booklet You can claim him as a dependent if all other tests are met, including the gross income test and support test. Form 1040ez booklet Foster child. Form 1040ez booklet   A foster child is an individual who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. Form 1040ez booklet Joint return. Form 1040ez booklet   If you file a joint return, the person can be related to either you or your spouse. Form 1040ez booklet Also, the person does not need to be related to the spouse who provides support. Form 1040ez booklet   For example, your spouse's uncle who receives more than half of his support from you may be your qualifying relative, even though he does not live with you. Form 1040ez booklet However, if you and your spouse file separate returns, your spouse's uncle can be your qualifying relative only if he lives with you all year as a member of your household. Form 1040ez booklet Temporary absences. Form 1040ez booklet   A person is considered to live with you as a member of your household during periods of time when one of you, or both, are temporarily absent due to special circumstances such as: Illness, Education, Business, Vacation, or Military service. Form 1040ez booklet   If the person is placed in a nursing home for an indefinite period of time to receive constant medical care, the absence may be considered temporary. Form 1040ez booklet Death or birth. Form 1040ez booklet   A person who died during the year, but lived with you as a member of your household until death, will meet this test. Form 1040ez booklet The same is true for a child who was born during the year and lived with you as a member of your household for the rest of the year. Form 1040ez booklet The test is also met if a child lived with you as a member of your household except for any required hospital stay following birth. Form 1040ez booklet   If your dependent died during the year and you otherwise qualify to claim an exemption for the dependent, you can still claim the exemption. Form 1040ez booklet Example. Form 1040ez booklet Your dependent mother died on January 15. Form 1040ez booklet She met the tests to be your qualifying relative. Form 1040ez booklet The other tests to claim an exemption for a dependent were also met. Form 1040ez booklet You can claim an exemption for her on your return. Form 1040ez booklet Local law violated. Form 1040ez booklet   A person does not meet this test if at any time during the year the relationship between you and that person violates local law. Form 1040ez booklet Example. Form 1040ez booklet Your girlfriend lived with you as a member of your household all year. Form 1040ez booklet However, your relationship with her violated the laws of the state where you live, because she was married to someone else. Form 1040ez booklet Therefore, she does not meet this test and you cannot claim her as a dependent. Form 1040ez booklet Adopted child. Form 1040ez booklet   An adopted child is always treated as your own child. Form 1040ez booklet The term “adopted child” includes a child who was lawfully placed with you for legal adoption. Form 1040ez booklet Cousin. Form 1040ez booklet   Your cousin meets this test only if he or she lives with you all year as a member of your household. Form 1040ez booklet A cousin is a descendant of a brother or sister of your father or mother. Form 1040ez booklet Gross Income Test To meet this test, a person's gross income for the year must be less than $3,900. Form 1040ez booklet Gross income defined. Form 1040ez booklet   Gross income is all income in the form of money, property, and services that is not exempt from tax. Form 1040ez booklet   In a manufacturing, merchandising, or mining business, gross income is the total net sales minus the cost of goods sold, plus any miscellaneous income from the business. Form 1040ez booklet   Gross receipts from rental property are gross income. Form 1040ez booklet Do not deduct taxes, repairs, or other expenses, to determine the gross income from rental property. Form 1040ez booklet   Gross income includes a partner's share of the gross (not a share of the net) partnership income. Form 1040ez booklet    Gross income also includes all taxable unemployment compensation and certain scholarship and fellowship grants. Form 1040ez booklet Scholarships received by degree candidates and used for tuition, fees, supplies, books, and equipment required for particular courses generally are not included in gross income. Form 1040ez booklet For more information about scholarships, see chapter 12. Form 1040ez booklet   Tax-exempt income, such as certain social security benefits, is not included in gross income. Form 1040ez booklet Disabled dependent working at sheltered workshop. Form 1040ez booklet   For purposes of the gross income test, the gross income of an individual who is permanently and totally disabled at any time during the year does not include income for services the individual performs at a sheltered workshop. Form 1040ez booklet The availability of medical care at the workshop must be the main reason for the individual's presence there. Form 1040ez booklet Also, the income must come solely from activities at the workshop that are incident to this medical care. Form 1040ez booklet   A “sheltered workshop” is a school that: Provides special instruction or training designed to alleviate the disability of the individual, and Is operated by certain tax-exempt organizations, or by a state, a U. Form 1040ez booklet S. Form 1040ez booklet possession, a political subdivision of a state or possession, the United States, or the District of Columbia. Form 1040ez booklet “Permanently and totally disabled” has the same meaning here as under Qualifying Child, earlier. Form 1040ez booklet Support Test (To Be a Qualifying Relative) To meet this test, you generally must provide more than half of a person's total support during the calendar year. Form 1040ez booklet However, if two or more persons provide support, but no one person provides more than half of a person's total support, see Multiple Support Agreement , later. Form 1040ez booklet How to determine if support test is met. Form 1040ez booklet   You figure whether you have provided more than half of a person's total support by comparing the amount you contributed to that person's support with the entire amount of support that person received from all sources. Form 1040ez booklet This includes support the person provided from his or her own funds. Form 1040ez booklet   You may find Worksheet 3-1 helpful in figuring whether you provided more than half of a person's support. Form 1040ez booklet Person's own funds not used for support. Form 1040ez booklet   A person's own funds are not support unless they are actually spent for support. Form 1040ez booklet Example. Form 1040ez booklet Your mother received $2,400 in social security benefits and $300 in interest. Form 1040ez booklet She paid $2,000 for lodging and $400 for recreation. Form 1040ez booklet She put $300 in a savings account. Form 1040ez booklet Even though your mother received a total of $2,700 ($2,400 + $300), she spent only $2,400 ($2,000 + $400) for her own support. Form 1040ez booklet If you spent more than $2,400 for her support and no other support was received, you have provided more than half of her support. Form 1040ez booklet Child's wages used for own support. Form 1040ez booklet   You cannot include in your contribution to your child's support any support paid for by the child with the child's own wages, even if you paid the wages. Form 1040ez booklet Year support is provided. Form 1040ez booklet   The year you provide the support is the year you pay for it, even if you do so with borrowed money that you repay in a later year. Form 1040ez booklet   If you use a fiscal year to report your income, you must provide more than half of the dependent's support for the calendar year in which your fiscal year begins. Form 1040ez booklet Armed Forces dependency allotments. Form 1040ez booklet   The part of the allotment contributed by the government and the part taken out of your military pay are both considered provided by you in figuring whether you provide more than half of the support. Form 1040ez booklet If your allotment is used to support persons other than those you name, you can take the exemptions for them if they otherwise qualify. Form 1040ez booklet Example. Form 1040ez booklet You are in the Armed Forces. Form 1040ez booklet You authorize an allotment for your widowed mother that she uses to support herself and her sister. Form 1040ez booklet If the allotment provides more than half of each person's support, you can take an exemption for each of them, if they otherwise qualify, even though you authorize the allotment only for your mother. Form 1040ez booklet Tax-exempt military quarters allowances. Form 1040ez booklet   These allowances are treated the same way as dependency allotments in figuring support. Form 1040ez booklet The allotment of pay and the tax-exempt basic allowance for quarters are both considered as provided by you for support. Form 1040ez booklet Tax-exempt income. Form 1040ez booklet   In figuring a person's total support, include tax-exempt income, savings, and borrowed amounts used to support that person. Form 1040ez booklet Tax-exempt income includes certain social security benefits, welfare benefits, nontaxable life insurance proceeds, Armed Forces family allotments, nontaxable pensions, and tax-exempt interest. Form 1040ez booklet Example 1. Form 1040ez booklet You provide $4,000 toward your mother's support during the year. Form 1040ez booklet She has earned income of $600, nontaxable social security benefits of $4,800, and tax-exempt interest of $200. Form 1040ez booklet She uses all these for her support. Form 1040ez booklet You cannot claim an exemption for your mother because the $4,000 you provide is not more than half of her total support of $9,600 ($4,000 + $600 + $4,800 + $200). Form 1040ez booklet Example 2. Form 1040ez booklet Your niece takes out a student loan of $2,500 a
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Page Last Reviewed or Updated: 14-Mar-2014

The Form 1040ez Booklet

Form 1040ez booklet 5. Form 1040ez booklet   Personal Use of Dwelling Unit (Including Vacation Home) Table of Contents Dividing Expenses Dwelling Unit Used as a HomeMain home. Form 1040ez booklet Shared equity financing agreement. Form 1040ez booklet Donation of use of the property. Form 1040ez booklet Examples. Form 1040ez booklet Days used for repairs and maintenance. Form 1040ez booklet Days used as a main home before or after renting. Form 1040ez booklet Reporting Income and DeductionsNot used as a home. Form 1040ez booklet Used as a home but rented less than 15 days. Form 1040ez booklet Used as a home and rented 15 days or more. Form 1040ez booklet 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. Form 1040ez booklet 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. Form 1040ez booklet Only your rental expenses may deducted on Schedule E (Form 1040). Form 1040ez booklet Some of your personal expenses may be deductible if you itemize your deductions on Schedule A (Form 1040). Form 1040ez booklet You must also determine if the dwelling unit is considered a home. Form 1040ez booklet The amount of rental expenses that you can deduct may be limited if the dwelling unit is considered a home. Form 1040ez booklet Whether a dwelling unit is considered a home depends on how many days during the year are considered to be days of personal use. Form 1040ez booklet 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. Form 1040ez booklet Dwelling unit. Form 1040ez booklet   A dwelling unit includes a house, apartment, condominium, mobile home, boat, vacation home, or similar property. Form 1040ez booklet It also includes all structures or other property belonging to the dwelling unit. Form 1040ez booklet A dwelling unit has basic living accommodations, such as sleeping space, a toilet, and cooking facilities. Form 1040ez booklet   A dwelling unit does not include property (or part of the property) used solely as a hotel, motel, inn, or similar establishment. Form 1040ez booklet 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. Form 1040ez booklet Example. Form 1040ez booklet You rent a room in your home that is always available for short-term occupancy by paying customers. Form 1040ez booklet You do not use the room yourself and you allow only paying customers to use the room. Form 1040ez booklet This room is used solely as a hotel, motel, inn, or similar establishment and is not a dwelling unit. Form 1040ez booklet 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. Form 1040ez booklet When dividing your expenses, follow these rules. Form 1040ez booklet 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. Form 1040ez booklet (This rule does not apply when determining whether you used the unit as a home. Form 1040ez booklet ) Any day that the unit is available for rent but not actually rented is not a day of rental use. Form 1040ez booklet Fair rental price. Form 1040ez booklet   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. Form 1040ez booklet 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. Form 1040ez booklet   Ask yourself the following questions when comparing another property with yours. Form 1040ez booklet Is it used for the same purpose? Is it approximately the same size? Is it in approximately the same condition? Does it have similar furnishings? Is it in a similar location? If any of the answers are no, the properties probably are not similar. Form 1040ez booklet Example. Form 1040ez booklet Your beach cottage was available for rent from June 1 through August 31 (92 days). Form 1040ez booklet 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 during that time. Form 1040ez booklet 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. Form 1040ez booklet Your family also used the cottage during the last 2 weeks of May (14 days). Form 1040ez booklet The cottage was not used at all before May 17 or after August 31. Form 1040ez booklet You figure the part of the cottage expenses to treat as rental expenses as follows. Form 1040ez booklet The cottage was used for rental a total of 85 days (92 − 7). Form 1040ez booklet The days it was available for rent but not rented (7 days) are not days of rental use. Form 1040ez booklet The July weekend (2 days) you used it is rental use because you received a fair rental price for the weekend. Form 1040ez booklet You used the cottage for personal purposes for 14 days (the last 2 weeks in May). Form 1040ez booklet The total use of the cottage was 99 days (14 days personal use + 85 days rental use). Form 1040ez booklet Your rental expenses are 85/99 (86%) of the cottage expenses. Form 1040ez booklet Note. Form 1040ez booklet 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. Form 1040ez booklet Therefore, you had 16 days of personal use and 83 days of rental use for this purpose. Form 1040ez booklet 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. Form 1040ez booklet If you have a net loss, you may not be able to deduct all of the rental expenses. Form 1040ez booklet See Dwelling Unit Used as a Home, next. Form 1040ez booklet 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. Form 1040ez booklet 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. Form 1040ez booklet See What is a day of personal use , later. Form 1040ez booklet If a dwelling unit is used for personal purposes on a day it is rented at a fair rental price (discussed earlier), do not count that day as a day of rental use in applying (2) above. Form 1040ez booklet Instead, count it as a day of personal use in applying both (1) and (2) above. Form 1040ez booklet 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. Form 1040ez booklet You or any other person who owns an interest in it, unless you rent it to another owner as his or her main home under a shared equity financing agreement (defined later). Form 1040ez booklet However, see Days used as a main home before or after renting , later. Form 1040ez booklet A member of your family or a member of the family of any other person who owns an interest in it, unless the family member uses the dwelling unit as his or her main home and pays a fair rental price. Form 1040ez booklet Family includes only your spouse, brothers and sisters, half-brothers and half-sisters, ancestors (parents, grandparents, etc. Form 1040ez booklet ), and lineal descendants (children, grandchildren, etc. Form 1040ez booklet ). Form 1040ez booklet Anyone under an arrangement that lets you use some other dwelling unit. Form 1040ez booklet Anyone at less than a fair rental price. Form 1040ez booklet Main home. Form 1040ez booklet   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. Form 1040ez booklet Shared equity financing agreement. Form 1040ez booklet   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. Form 1040ez booklet Donation of use of the property. Form 1040ez booklet   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. Form 1040ez booklet Examples. Form 1040ez booklet   The following examples show how to determine if you have days of personal use. Form 1040ez booklet Example 1. Form 1040ez booklet You and your neighbor are co-owners of a condominium at the beach. Form 1040ez booklet Last year, you rented the unit to vacationers whenever possible. Form 1040ez booklet The unit was not used as a main home by anyone. Form 1040ez booklet Your neighbor used the unit for 2 weeks last year; you did not use it at all. Form 1040ez booklet 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. Form 1040ez booklet Example 2. Form 1040ez booklet You and your neighbors are co-owners of a house under a shared equity financing agreement. Form 1040ez booklet Your neighbors live in the house and pay you a fair rental price. Form 1040ez booklet 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. Form 1040ez booklet This is because your neighbors rent the house as their main home under a shared equity financing agreement. Form 1040ez booklet Example 3. Form 1040ez booklet You own a rental property that you rent to your son. Form 1040ez booklet Your son does not own any interest in this property. Form 1040ez booklet He uses it as his main home and pays you a fair rental price. Form 1040ez booklet 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. Form 1040ez booklet Example 4. Form 1040ez booklet You rent your beach house to Rosa. Form 1040ez booklet Rosa rents her cabin in the mountains to you. Form 1040ez booklet You each pay a fair rental price. Form 1040ez booklet You are using your beach house for personal purposes on the days that Rosa uses it because your house is used by Rosa under an arrangement that allows you to use her cabin. Form 1040ez booklet Example 5. Form 1040ez booklet You rent an apartment to your mother at less than a fair rental price. Form 1040ez booklet You are using the apartment for personal purposes on the days that your mother rents it because you rent it for less than a fair rental price. Form 1040ez booklet Days used for repairs and maintenance. Form 1040ez booklet   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. Form 1040ez booklet 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. Form 1040ez booklet Example. Form 1040ez booklet Corey owns a cabin in the mountains that he rents for most of the year. Form 1040ez booklet He spends a week at the cabin with family members. Form 1040ez booklet Corey works on maintenance of the cabin 3 or 4 hours each day during the week and spends the rest of the time fishing, hiking, and relaxing. Form 1040ez booklet Corey's family members, however, work substantially full time on the cabin each day during the week. Form 1040ez booklet The main purpose of being at the cabin that week is to do maintenance work. Form 1040ez booklet Therefore, the use of the cabin during the week by Corey and his family will not be considered personal use by Corey. Form 1040ez booklet Days used as a main home before or after renting. Form 1040ez booklet   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. Form 1040ez booklet Do not count them as days of personal use if: You rented or tried to rent the property for 12 or more consecutive months. Form 1040ez booklet 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. Form 1040ez booklet However, this special rule does not apply when dividing expenses between rental and personal use. Form 1040ez booklet See Property Changed to Rental Use in chapter 4. Form 1040ez booklet Example 1. Form 1040ez booklet On February 29, 2012, you moved out of the house you had lived in for 6 years because you accepted a job in another town. Form 1040ez booklet You rented your house at a fair rental price from March 15, 2012, to May 14, 2013 (14 months). Form 1040ez booklet On June 1, 2013, you moved back into your old house. Form 1040ez booklet The days you used the house as your main home from January 1 to February 29, 2012, and from June 1 to December 31, 2013, are not counted as days of personal use. Form 1040ez booklet Therefore, you would use the rules in chapter 1 when figuring your rental income and expenses. Form 1040ez booklet Example 2. Form 1040ez booklet On January 31, you moved out of the condominium where you had lived for 3 years. Form 1040ez booklet You offered it for rent at a fair rental price beginning on February 1. Form 1040ez booklet You were unable to rent it until April. Form 1040ez booklet On September 15, you sold the condominium. Form 1040ez booklet The days you used the condominium as your main home from January 1 to January 31 are not counted as days of personal use when determining whether you used it as a home. Form 1040ez booklet Examples. Form 1040ez booklet   The following examples show how to determine whether you used your rental property as a home. Form 1040ez booklet Example 1. Form 1040ez booklet You converted the basement of your home into an apartment with a bedroom, a bathroom, and a small kitchen. Form 1040ez booklet You rented the basement apartment at a fair rental price to college students during the regular school year. Form 1040ez booklet You rented to them on a 9-month lease (273 days). Form 1040ez booklet You figured 10% of the total days rented to others at a fair rental price is 27 days. Form 1040ez booklet During June (30 days), your brothers stayed with you and lived in the basement apartment rent free. Form 1040ez booklet Your basement apartment was used as a home because you used it for personal purposes for 30 days. Form 1040ez booklet Rent-free use by your brothers is considered personal use. Form 1040ez booklet Your personal use (30 days) is more than the greater of 14 days or 10% of the total days it was rented (27 days). Form 1040ez booklet Example 2. Form 1040ez booklet 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). Form 1040ez booklet Your sister-in-law stayed in the room, rent free, for the last 3 weeks (21 days) in July. Form 1040ez booklet You figured 10% of the total days rented to others at a fair rental price is 3 days. Form 1040ez booklet The room was used as a home because you used it for personal purposes for 21 days. Form 1040ez booklet That is more than the greater of 14 days or 10% of the 27 days it was rented (3 days). Form 1040ez booklet Example 3. Form 1040ez booklet You own a condominium apartment in a resort area. Form 1040ez booklet You rented it at a fair rental price for a total of 170 days during the year. Form 1040ez booklet For 12 of these 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. Form 1040ez booklet Your family actually used the apartment for 10 of those days. Form 1040ez booklet Therefore, the apartment is treated as having been rented for 160 (170 – 10) days. Form 1040ez booklet You figured 10% of the total days rented to others at a fair rental price is 16 days. Form 1040ez booklet Your family also used the apartment for 7 other days during the year. Form 1040ez booklet You used the apartment as a home because you used it for personal purposes for 17 days. Form 1040ez booklet That is more than the greater of 14 days or 10% of the 160 days it was rented (16 days). Form 1040ez booklet Minimal rental use. Form 1040ez booklet   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. Form 1040ez booklet See Used as a home but rented less than 15 days, later, for more information. Form 1040ez booklet Limit on deductions. Form 1040ez booklet   Renting a dwelling unit that is considered a home is not a passive activity. Form 1040ez booklet 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. Form 1040ez booklet 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. Form 1040ez booklet Any expenses carried forward to the next year will be subject to any limits that apply for that year. Form 1040ez booklet 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. Form 1040ez booklet   To figure your deductible rental expenses for this year and any carryover to next year, use Worksheet 5–1. Form 1040ez booklet Reporting Income and Deductions Property not used for personal purposes. Form 1040ez booklet   If you do not use a dwelling unit for personal purposes, see chapter 3 for how to report your rental income and expenses. Form 1040ez booklet Property used for personal purposes. Form 1040ez booklet   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. Form 1040ez booklet Not used as a home. Form 1040ez booklet   If you use a dwelling unit for personal purposes, but not as a home, report all the rental income in your income. Form 1040ez booklet 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 this chapter under Dividing Expenses . Form 1040ez booklet The expenses for personal use are not deductible as rental expenses. Form 1040ez booklet   Your deductible rental expenses can be more than your gross rental income; however, see Limits on Rental Losses in chapter 3. Form 1040ez booklet Used as a home but rented less than 15 days. Form 1040ez booklet   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). Form 1040ez booklet You are not required to report the rental income and rental expenses from this activity. Form 1040ez booklet The expenses, including qualified mortgage interest, property taxes, and any qualified casualty loss will be reported as normally allowed on Schedule A (Form 1040). Form 1040ez booklet See the Instructions for Schedule A (Form 1040) for more information on deducting these expenses. Form 1040ez booklet Used as a home and rented 15 days or more. Form 1040ez booklet   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. Form 1040ez booklet 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 this chapter under Dividing Expenses . Form 1040ez booklet The expenses for personal use are not deductible as rental expenses. Form 1040ez booklet   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. Form 1040ez booklet You do not need to use Worksheet 5-1. Form 1040ez booklet   However, if you had a net loss from renting the dwelling unit for the year, your deduction for certain rental expenses is limited. Form 1040ez booklet To figure your deductible rental expenses and any carryover to next year, use Worksheet 5–1. Form 1040ez booklet Worksheet 5-1. Form 1040ez booklet 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. Form 1040ez booklet Did you use the dwelling unit as a home this year? (See Dwelling Unit Used as a Home . Form 1040ez booklet ) 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. Form 1040ez booklet Rental Use Percentage A. Form 1040ez booklet Total days available for rent at fair rental price A. Form 1040ez booklet       B. Form 1040ez booklet Total days available for rent (line A) but not rented B. Form 1040ez booklet       C. Form 1040ez booklet Total days of rental use. Form 1040ez booklet Subtract line B from line A C. Form 1040ez booklet       D. Form 1040ez booklet Total days of personal use (including days rented at less than fair rental price) D. Form 1040ez booklet       E. Form 1040ez booklet Total days of rental and personal use. Form 1040ez booklet Add lines C and D E. Form 1040ez booklet       F. Form 1040ez booklet Percentage of expenses allowed for rental. Form 1040ez booklet Divide line C by line E     F. Form 1040ez booklet . Form 1040ez booklet PART II. Form 1040ez booklet Allowable Rental Expenses 1. Form 1040ez booklet Enter rents received 1. Form 1040ez booklet   2a. Form 1040ez booklet Enter the rental portion of deductible home mortgage interest and qualified mortgage insurance premiums (see instructions) 2a. Form 1040ez booklet       b. Form 1040ez booklet Enter the rental portion of real estate taxes b. Form 1040ez booklet       c. Form 1040ez booklet Enter the rental portion of deductible casualty and theft losses (see instructions) c. Form 1040ez booklet       d. Form 1040ez booklet Enter direct rental expenses (see instructions) d. Form 1040ez booklet       e. Form 1040ez booklet Fully deductible rental expenses. Form 1040ez booklet Add lines 2a–2d. Form 1040ez booklet Enter here and  on the appropriate lines on Schedule E (see instructions) 2e. Form 1040ez booklet   3. Form 1040ez booklet Subtract line 2e from line 1. Form 1040ez booklet If zero or less, enter -0- 3. Form 1040ez booklet   4a. Form 1040ez booklet Enter the rental portion of expenses directly related to operating or maintaining  the dwelling unit (such as repairs, insurance, and utilities) 4a. Form 1040ez booklet       b. Form 1040ez booklet Enter the rental portion of excess mortgage interest and qualified mortgage insurance premiums (see instructions) b. Form 1040ez booklet       c. Form 1040ez booklet Carryover of operating expenses from 2012 worksheet c. Form 1040ez booklet       d. Form 1040ez booklet Add lines 4a–4c d. Form 1040ez booklet       e. Form 1040ez booklet Allowable expenses. Form 1040ez booklet Enter the smaller of line 3 or line 4d (see instructions) 4e. Form 1040ez booklet   5. Form 1040ez booklet Subtract line 4e from line 3. Form 1040ez booklet If zero or less, enter -0- 5. Form 1040ez booklet   6a. Form 1040ez booklet Enter the rental portion of excess casualty and theft losses (see instructions) 6a. Form 1040ez booklet       b. Form 1040ez booklet Enter the rental portion of depreciation of the dwelling unit b. Form 1040ez booklet       c. Form 1040ez booklet Carryover of excess casualty losses and depreciation from 2012 worksheet c. Form 1040ez booklet       d. Form 1040ez booklet Add lines 6a–6c d. Form 1040ez booklet       e. Form 1040ez booklet Allowable excess casualty and theft losses and depreciation. Form 1040ez booklet Enter the smaller of  line 5 or line 6d (see instructions) 6e. Form 1040ez booklet   PART III. Form 1040ez booklet Carryover of Unallowed Expenses to Next Year 7a. Form 1040ez booklet Operating expenses to be carried over to next year. Form 1040ez booklet Subtract line 4e from line 4d 7a. Form 1040ez booklet   b. Form 1040ez booklet Excess casualty and theft losses and depreciation to be carried over to next year. Form 1040ez booklet  Subtract line 6e from line 6d b. Form 1040ez booklet   Worksheet 5-1 Instructions. Form 1040ez booklet Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Caution. Form 1040ez booklet 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. Form 1040ez booklet Line 2a. Form 1040ez booklet Figure the mortgage interest on the dwelling unit that you could deduct on Schedule A as if you had not rented the unit. Form 1040ez booklet Do not include interest on a loan that did not benefit the dwelling unit. Form 1040ez booklet 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. Form 1040ez booklet Include interest on a loan used to buy, build, or improve the dwelling unit, or to refinance such a loan. Form 1040ez booklet Include the rental portion of this interest in the total you enter on line 2a of the worksheet. Form 1040ez booklet   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. Form 1040ez booklet See the Schedule A instructions. Form 1040ez booklet However, figure your adjusted gross income (Form 1040, line 38) without your rental income and expenses from the dwelling unit. Form 1040ez booklet See Line 4b to deduct the part of the qualified mortgage insurance premiums not allowed because of the adjusted gross income limit. Form 1040ez booklet Include the rental portion of the amount from Schedule A, line 13, in the total you enter on line 2a of the worksheet. Form 1040ez booklet   Note. Form 1040ez booklet Do not file this Schedule A or use it to figure the amount to deduct on line 13 of that schedule. Form 1040ez booklet Instead, figure the personal portion on a separate Schedule A. Form 1040ez booklet 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. Form 1040ez booklet           Line 2c. Form 1040ez booklet 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. Form 1040ez booklet To do this, complete Section A of Form 4684, Casualties and Thefts, treating the losses as personal losses. Form 1040ez booklet If any of the loss is due to a federally declared disaster, see the Instructions for Form 4684. Form 1040ez booklet On Form 4684, line 17, enter 10% of your adjusted gross income figured without your rental income and expenses from the dwelling unit. Form 1040ez booklet Enter the rental portion of the result from Form 4684, line 18, on line 2c of this worksheet. Form 1040ez booklet   Note. Form 1040ez booklet Do not file this Form 4684 or use it to figure your personal losses on Schedule A. Form 1040ez booklet Instead, figure the personal portion on a separate Form 4684. Form 1040ez booklet           Line 2d. Form 1040ez booklet Enter the total of your rental expenses that are directly related only to the rental activity. Form 1040ez booklet These include interest on loans used for rental activities other than to buy, build, or improve the dwelling unit. Form 1040ez booklet Also include rental agency fees, advertising, office supplies, and depreciation on office equipment used in your rental activity. Form 1040ez booklet           Line 2e. Form 1040ez booklet 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. Form 1040ez booklet Enter the amounts on lines 2a, 2b, 2c, and 2d on the appropriate lines of Schedule E. Form 1040ez booklet           Line 4b. Form 1040ez booklet On line 2a, you entered the rental portion of the mortgage interest or qualified mortgage insurance premiums you could deduct on Schedule A if you had not rented the dwelling unit. Form 1040ez booklet 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. Form 1040ez booklet Do not include interest on a loan that did not benefit the dwelling unit  (as explained in the line 2a instructions). Form 1040ez booklet           Line 4e. Form 1040ez booklet 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. Form 1040ez booklet *           Line 6a. Form 1040ez booklet To find the rental portion of excess casualty and theft losses, use the Form 4684 you prepared for line 2c of this worksheet. Form 1040ez booklet   A. Form 1040ez booklet Enter the amount from Form 4684, line 10       B. Form 1040ez booklet Enter the rental portion of line A       C. Form 1040ez booklet Enter the amount from line 2c of this worksheet       D. Form 1040ez booklet Subtract line C from line B. Form 1040ez booklet Enter the result here and on line 6a of this worksheet               Line 6e. Form 1040ez booklet 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. Form 1040ez booklet * *Allocating the limited deduction. Form 1040ez booklet 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. Form 1040ez booklet Enter the amount you allocate to each expense on the appropriate line of Schedule E, Part I. Form 1040ez booklet Prev  Up  Next   Home   More Online Publications