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How To Fill Out A 1040x

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How To Fill Out A 1040x

How to fill out a 1040x Publication 551 - Introductory Material Table of Contents What's New Reminder IntroductionOrdering forms and publications. How to fill out a 1040x Tax questions. How to fill out a 1040x Useful Items - You may want to see: What's New Property acquired from a decedent who died in 2010. How to fill out a 1040x  Property acquired from a decedent dying in 2010 will no longer have an automatic increase in basis. How to fill out a 1040x See Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, for details. How to fill out a 1040x Reminder Photographs of missing children. How to fill out a 1040x  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. How to fill out a 1040x Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. How to fill out a 1040x You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. How to fill out a 1040x Introduction Basis is the amount of your investment in property for tax purposes. How to fill out a 1040x Use the basis of property to figure depreciation, amortization, depletion, and casualty losses. How to fill out a 1040x Also use it to figure gain or loss on the sale or other disposition of property. How to fill out a 1040x You must keep accurate records of all items that affect the basis of property so you can make these computations. How to fill out a 1040x This publication is divided into the following sections. How to fill out a 1040x Cost Basis Adjusted Basis Basis Other Than Cost The basis of property you buy is usually its cost. How to fill out a 1040x You may also have to capitalize (add to basis) certain other costs related to buying or producing the property. How to fill out a 1040x Your original basis in property is adjusted (increased or decreased) by certain events. How to fill out a 1040x If you make improvements to the property, increase your basis. How to fill out a 1040x If you take deductions for depreciation or casualty losses, reduce your basis. How to fill out a 1040x You cannot determine your basis in some assets by cost. How to fill out a 1040x This includes property you receive as a gift or inheritance. How to fill out a 1040x It also applies to property received in an involuntary conversion and certain other circumstances. How to fill out a 1040x Comments and suggestions. How to fill out a 1040x   We welcome your comments about this publication and your suggestions for future editions. How to fill out a 1040x   You can write to us at the following address: Internal Revenue Service Business Forms and Publications Branch SE:W:CAR:MP:T:B 1111 Constitution Ave. How to fill out a 1040x NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. How to fill out a 1040x Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. How to fill out a 1040x   You can email us at taxforms@irs. How to fill out a 1040x gov. How to fill out a 1040x Please put “Publications Comment” on the subject line. How to fill out a 1040x You can also send us comments from www. How to fill out a 1040x irs. How to fill out a 1040x gov/formspubs/, select “Comment on Tax Forms and Publications” under “Information about. How to fill out a 1040x ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. How to fill out a 1040x Ordering forms and publications. How to fill out a 1040x   Visit www. How to fill out a 1040x irs. How to fill out a 1040x gov/formspubs to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response within 10 business days after your request is received. How to fill out a 1040x  Internal Revenue Service  1201 N. How to fill out a 1040x Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. How to fill out a 1040x   If you have a tax question, visit IRS. How to fill out a 1040x gov or call 1-800-829-1040. How to fill out a 1040x We cannot answer tax questions sent to either of the above addresses. How to fill out a 1040x Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 523 Selling Your Home 525 Taxable and Nontaxable Income 527 Residential Rental Property 530 Tax Information for First-Time Homeowners 535 Business Expenses 537 Installment Sales 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 559 Survivors, Executors, and Administrators 587 Business Use of Your Home 946 How To Depreciate Property Form (and Instructions) 706 United States Estate (and Generation-Skipping Transfer) Tax Return 706-A United States Additional Estate Tax Return 8594 Asset Acquisition Statement See How To Get Tax Help near the end of this publication for information about getting publications and forms. How to fill out a 1040x Prev  Up  Next   Home   More Online Publications
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Report Outlines Changes for IRS To Ensure Accountability, Chart a Path Forward; Immediate Actions, Next Steps Outlined

Updated 7/15/2013 to reflect that the IRS will issue monthly updates. 

IR-2013-62, June 24, 2013

WASHINGTON ― Internal Revenue Service Principal Deputy Commissioner Danny Werfel today issued a report outlining new actions and next steps to fix problems uncovered with the IRS’ review of tax-exempt applications and improve the wider processes and operations in place at the IRS.

The three-part report covers a wide range of areas Werfel and his leadership team examined during the past month. The report cites actions to hold management accountable and identifies immediate steps to help put the process for approving tax-exempt applications back on track. Werfel also outlines actions needed to protect and improve wider IRS operations, ranging from compliance areas to taxpayer service.

“It is critical that the IRS takes steps to ensure accountability, address the problems uncovered in recent weeks and improve the operations of the IRS to continue to carry out our critical mission on behalf of the public,” Werfel said. “We have made a number of changes already, more are in the works and even more will develop as we move forward.”

Importantly, the initial IRS review shows no signs of intentional wrongdoing by IRS personnel or involvement by parties outside the IRS in the activities described in the recent TIGTA  report.  However, the report notes that investigations are ongoing, and that the IRS is committed to a full fact-finding effort to provide the public answers to these and other important questions.

“The IRS is committed to correcting its mistakes, holding people accountable, and establishing control elements that will help us mitigate the risks we face,” Werfel said. “This report is a critical first step in the process of restoring trust in this critical institution. We have more work in front of us, but we believe we are on the right track to move forward.”

Werfel’s report, titled “Charting a Path Forward at the IRS: Initial Assessment and Plan of Action,” covers three primary areas:

Accountability. This covers the steps being taken to ensure accountability for the mismanagement described in last month’s Treasury Inspector General for Tax Administration (TIGTA) report:

  • The report finds that significant management and judgment failures occurred, as outlined in the TIGTA report. These contributed to the inappropriate treatment of taxpayers applying for tax- exempt status. 
  • To address this, new leadership has been installed across all five executive management levels involved in the chain of command connected to these matters. In addition, the IRS has empaneled an Accountability Review Board to provide recommendations within 60 days (and later as needed) on any additional personnel actions that should be taken.

Fixing the Problems with the Review of Applications for Tax-Exempt Status. This part covers several process improvements underway to ensure that taxpayers are treated appropriately and effectively in the review of applications for tax-exempt status:  

  • The report outlines a new voluntary process to help certain applicants gain fast-track approval to operate as a 501(c)(4) tax-exempt entity if they are being reviewed for advocacy questions and  have been in our application backlog for more than 120 days. This self-certification process allows them a streamlined path to tax-exempt status if they certify they will operate within specified limits and thresholds of political and social welfare activities. In addition, the IRS has added new technical and program staff to assist with reviewing 501(c)(4) applications.
  • The IRS also suspended the use of any “be-on-the-lookout,” or BOLO lists in the application process for tax-exempt status.

Review of IRS Operations and Risks. The report identifies a series of actions to ensure taxpayers that selection criteria across the IRS are appropriate and that taxpayers are aware of how they can seek assistance if they have concerns about the IRS. The report further outlines steps underway to ensure that critical program or operational risks within the IRS are identified early, raised to the right decision-makers and shared timely with key stakeholders:

  • The report calls for establishing an Enterprise Risk Management Program to provide a common framework for capturing, reporting and addressing risk areas across the IRS.  This will improve timeliness in bringing information to the attention of the IRS Commissioner and other IRS leaders as well as key stakeholders to help prevent future instances of inappropriate treatment or mismanagement.
  • Although there is no current evidence that selection criteria in other IRS organizations is inappropriate, the nature of the problems identified in the tax-exempt application process warrants a review of certain process controls within the IRS.  The IRS will initiate a comprehensive, agency-wide review of compliance selection criteria.  Results will be shared with the Department of the Treasury, the IRS Oversight Board, and the Chairpersons of the House Ways and Means Committee and the Senate Finance Committee.
  • The IRS will initiate additional internal and external education and outreach about the role of the National Taxpayer Advocate in assisting taxpayers in resolving problems they encounter with the IRS. 

In addition to posting the report on IRS.gov, the IRS will provide monthly updates to the progress made on the TIGTA report’s recommendations and provide other developments related to this effort.

Related Items:

  • Recommended Actions — Status of recommended actions from the Treasury Inspector General for Tax Administration (TIGTA) on IRS's Exempt Organizations (EO) Division (updated as appropriate) and other information
  • FS-2013-7, Highlights from the IRS Report
  • FS-2013-8, IRS Offers New Streamlined Option to Certain 501(c)(4) Groups Caught in Application Backlog

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Page Last Reviewed or Updated: 04-Sep-2013

The How To Fill Out A 1040x

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