Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

Free Online Tax Filing State Federal

Can College Students File For TaxesNeed Do 2011 TaxesFree E File State Tax Return10 Ez FormHr Block Taxes OnlineCan I File State Taxes For FreeStudent Filing Taxes 2013How Can I File My 2009 Taxes Online For Free1040ez For 2010 Tax Year1040eztaxformMyfreetaxesMypay Dfas Mil MypayIrs Form1040H And R BlockTurbo Tax Free For MilitaryEfile State Tax Return2013 1040ez Form InstructionsHr Block ComH&r BlocksPrintable 2011 Tax FormsHow To Amend My Tax ReturnWww Irs Gov Freefile ComWww Irs Gov 2012 Tax FormsFillable 1040ez 2012Free Tax Filing 2011Irs Forms 1040ez InstructionsFile State Taxes Only2010 1040 Tax Form2011 Irs Form 1040ezFile Form 1040x OnlineFile State Tax Return Free Online1040 Ez Tax FormsDeadline For Filing Taxes2012 Income Tax FormsWebsite Efile Past Year Tax ReturnsFree Online Tax PreparationFree Ez Tax FormFree State Tax E-file10ez2010 Federal Income Tax Forms

Free Online Tax Filing State Federal

Free online tax filing state federal 9. Free online tax filing state federal   Figuring Net Profit or Loss Table of Contents Introduction Net Operating Losses (NOLs) Not-for-Profit Activities Introduction After figuring your business income and expenses, you are ready to figure the net profit or net loss from your business. Free online tax filing state federal You do this by subtracting business expenses from business income. Free online tax filing state federal If your expenses are less than your income, the difference is net profit and becomes part of your income on page 1 of Form 1040. Free online tax filing state federal If your expenses are more than your income, the difference is a net loss. Free online tax filing state federal You usually can deduct it from gross income on page 1 of Form 1040. Free online tax filing state federal But in some situations your loss is limited. Free online tax filing state federal This chapter briefly explains two of those situations. Free online tax filing state federal Other situations that may limit your loss are explained in the Instructions for Schedule C, line G and line 32. Free online tax filing state federal If you have more than one business, you must figure your net profit or loss for each business on a separate Schedule C. Free online tax filing state federal Net Operating Losses (NOLs) If your deductions for the year are more than your income for the year (line 41 of your Form 1040 is a negative number), you may have a net operating loss (NOL). Free online tax filing state federal You can use an NOL by deducting it from your income in another year or years. Free online tax filing state federal Examples of typical losses that may produce an NOL include, but are not limited to, losses incurred from the following. Free online tax filing state federal Your trade or business. Free online tax filing state federal Your work as an employee (unreimbursed employee business expenses). Free online tax filing state federal A casualty or theft. Free online tax filing state federal Moving expenses. Free online tax filing state federal Rental property. Free online tax filing state federal A loss from operating a business is the most common reason for an NOL. Free online tax filing state federal For details about NOLs, see Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts. Free online tax filing state federal It explains how to figure an NOL, when to use it, how to claim an NOL deduction, and how to figure an NOL carryover. Free online tax filing state federal Not-for-Profit Activities If you do not carry on your business to make a profit, there is a limit on the deductions you can take. Free online tax filing state federal You cannot use a loss from the activity to offset other income. Free online tax filing state federal Activities you do as a hobby, or mainly for sport or recreation, come under this limit. Free online tax filing state federal For details about not-for-profit activities, see chapter 1 in Publication 535, Business Expenses. Free online tax filing state federal That chapter explains how to determine whether your activity is carried on to make a profit and how to figure the amount of loss you can deduct. Free online tax filing state federal Prev  Up  Next   Home   More Online Publications
Español

Independent Agencies and Government Corporations

Independent establishments are created by Congress to address concerns that go beyond the scope of ordinary legislation. These agencies are responsible for keeping the government and economy running smoothly.



A

B

C

D

E

F

G

I

M

N

O

P

R

S

T

U

The Free Online Tax Filing State Federal

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