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Tax Form 1040x More:label_tax_20form_201040x More:bizfinance

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Tax Form 1040x More:label_tax_20form_201040x More:bizfinance

Tax form 1040x more:label_tax_20form_201040x more:bizfinance 12. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   How To Get Tax Help Table of Contents Low Income Taxpayer Clinics Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Free help with your tax return. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   You can get free help preparing your return nationwide from IRS-certified volunteers. Tax form 1040x more:label_tax_20form_201040x more:bizfinance The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Tax form 1040x more:label_tax_20form_201040x more:bizfinance The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Tax form 1040x more:label_tax_20form_201040x more:bizfinance In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Tax form 1040x more:label_tax_20form_201040x more:bizfinance To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance gov, download the IRS2Go app, or call 1-800-906-9887. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   As part of the TCE program, AARP offers the Tax-Aide counseling program. Tax form 1040x more:label_tax_20form_201040x more:bizfinance To find the nearest AARP Tax-Aide site, visit AARP's website at www. Tax form 1040x more:label_tax_20form_201040x more:bizfinance aarp. Tax form 1040x more:label_tax_20form_201040x more:bizfinance org/money/taxaide or call 1-888-227-7669. Tax form 1040x more:label_tax_20form_201040x more:bizfinance For more information on these programs, go to IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance gov and enter “VITA” in the search box. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Internet. Tax form 1040x more:label_tax_20form_201040x more:bizfinance    IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Download the free IRS2Go app from the iTunes app store or from Google Play. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Check the status of your 2013 refund with the Where's My Refund? application on IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance gov or download the IRS2Go app and select the Refund Status option. Tax form 1040x more:label_tax_20form_201040x more:bizfinance The IRS issues more than 9 out of 10 refunds in less than 21 days. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Tax form 1040x more:label_tax_20form_201040x more:bizfinance The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Use the Interactive Tax Assistant (ITA) to research your tax questions. Tax form 1040x more:label_tax_20form_201040x more:bizfinance No need to wait on the phone or stand in line. Tax form 1040x more:label_tax_20form_201040x more:bizfinance The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Tax form 1040x more:label_tax_20form_201040x more:bizfinance When you reach the response screen, you can print the entire interview and the final response for your records. Tax form 1040x more:label_tax_20form_201040x more:bizfinance New subject areas are added on a regular basis. Tax form 1040x more:label_tax_20form_201040x more:bizfinance  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You can use the IRS Tax Map, to search publications and instructions by topic or keyword. Tax form 1040x more:label_tax_20form_201040x more:bizfinance The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Tax form 1040x more:label_tax_20form_201040x more:bizfinance When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You can also ask the IRS to mail a return or an account transcript to you. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance gov or by calling 1-800-908-9946. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Tax return and tax account transcripts are generally available for the current year and the past three years. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Check the status of your amended return using Where's My Amended Return? Go to IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance gov and enter Where's My Amended Return? in the search box. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Tax form 1040x more:label_tax_20form_201040x more:bizfinance It can take up to 3 weeks from the date you mailed it to show up in our system. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Make a payment using one of several safe and convenient electronic payment options available on IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance gov. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Select the Payment tab on the front page of IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance gov for more information. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Figure your income tax withholding with the IRS Withholding Calculator on IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance gov. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance gov. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Request an Electronic Filing PIN by going to IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance gov and entering Electronic Filing PIN in the search box. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Download forms, instructions and publications, including accessible versions for people with disabilities. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Tax form 1040x more:label_tax_20form_201040x more:bizfinance An employee can answer questions about your tax account or help you set up a payment plan. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Before you visit, check the Office Locator on IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Tax form 1040x more:label_tax_20form_201040x more:bizfinance If you have a special need, such as a disability, you can request an appointment. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Apply for an Employer Identification Number (EIN). Tax form 1040x more:label_tax_20form_201040x more:bizfinance Go to IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance gov and enter Apply for an EIN in the search box. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Read the Internal Revenue Code, regulations, or other official guidance. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Read Internal Revenue Bulletins. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Sign up to receive local and national tax news and more by email. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Just click on “subscriptions” above the search box on IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance gov and choose from a variety of options. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Phone. Tax form 1040x more:label_tax_20form_201040x more:bizfinance    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Download the free IRS2Go app from the iTunes app store or from Google Play. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance gov, or download the IRS2Go app. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Tax form 1040x more:label_tax_20form_201040x more:bizfinance The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Most VITA and TCE sites offer free electronic filing. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Tax form 1040x more:label_tax_20form_201040x more:bizfinance If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Tax form 1040x more:label_tax_20form_201040x more:bizfinance The IRS issues more than 9 out of 10 refunds in less than 21 days. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Tax form 1040x more:label_tax_20form_201040x more:bizfinance The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Note, the above information is for our automated hotline. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Tax form 1040x more:label_tax_20form_201040x more:bizfinance It can take up to 3 weeks from the date you mailed it to show up in our system. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Tax form 1040x more:label_tax_20form_201040x more:bizfinance You should receive your order within 10 business days. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Tax form 1040x more:label_tax_20form_201040x more:bizfinance If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Tax form 1040x more:label_tax_20form_201040x more:bizfinance The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Tax form 1040x more:label_tax_20form_201040x more:bizfinance These individuals can also contact the IRS through relay services such as the Federal Relay Service. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Walk-in. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   You can find a selection of forms, publications and services — in-person. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Products. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Services. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You can walk in to your local TAC for face-to-face tax help. Tax form 1040x more:label_tax_20form_201040x more:bizfinance An employee can answer questions about your tax account or help you set up a payment plan. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Before visiting, use the Office Locator tool on IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   Please contact the office for times when assistance will be available. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Mail. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   You can send your order for forms, instructions, and publications to the address below. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You should receive a response within 10 business days after your request is received. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Internal Revenue Service 1201 N. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Mitsubishi Motorway Bloomington, IL 61705-6613   Taxpayer Advocate Service. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   The Taxpayer Advocate Service Is here to help you. Tax form 1040x more:label_tax_20form_201040x more:bizfinance The Taxpayer Advocate Service (TAS) is your voice at the IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Tax form 1040x more:label_tax_20form_201040x more:bizfinance We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You face (or your business is facing) an immediate threat of adverse action. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Here's why we can help: TAS is an independent organization within the IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Our advocates know how to work with the IRS. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Our services are free and tailored to meet your needs. Tax form 1040x more:label_tax_20form_201040x more:bizfinance We have offices in every state, the District of Columbia, and Puerto Rico. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. Tax form 1040x more:label_tax_20form_201040x more:bizfinance  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Tax form 1040x more:label_tax_20form_201040x more:bizfinance If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Low Income Taxpayer Clinics Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Visit Taxpayer Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Prev  Up  Next   Home   More Online Publications
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The Tax Form 1040x More:label_tax_20form_201040x More:bizfinance

Tax form 1040x more:label_tax_20form_201040x more:bizfinance 1. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   Rental Income and Expenses (If No Personal Use of Dwelling) Table of Contents Rental IncomeWhen To Report Types of Income Rental ExpensesWhen To Deduct Types of Expenses This chapter discusses the various types of rental income and expenses for a residential rental activity with no personal use of the dwelling. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Generally, each year you will report all income and deduct all out-of-pocket expenses in full. Tax form 1040x more:label_tax_20form_201040x more:bizfinance The deduction to recover the cost of your rental property—depreciation—is taken over a prescribed number of years, and is discussed in chapter 2, Depreciation of Rental Property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance If your rental income is from property you also use personally or rent to someone at less than a fair rental price, first read the information in chapter 5 , Personal Use of Dwelling Unit (Including Vacation Home). Tax form 1040x more:label_tax_20form_201040x more:bizfinance Rental Income In most cases, you must include in your gross income all amounts you receive as rent. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Rental income is any payment you receive for the use or occupation of property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance In addition to amounts you receive as normal rental payments, there are other amounts that may be rental income. Tax form 1040x more:label_tax_20form_201040x more:bizfinance When To Report When you report rental income on your tax return generally depends on whether you are a cash basis taxpayer or use an accrual method. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Most individual taxpayers use the cash method. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Cash method. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   You are a cash basis taxpayer if you report income on your return in the year you actually or constructively receive it, regardless of when it was earned. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You constructively receive income when it is made available to you, for example, by being credited to your bank account. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Accrual method. Tax form 1040x more:label_tax_20form_201040x more:bizfinance    If you are an accrual basis taxpayer, you generally report income when you earn it, rather than when you receive it. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You generally deduct your expenses when you incur them, rather than when you pay them. Tax form 1040x more:label_tax_20form_201040x more:bizfinance More information. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   See Publication 538, Accounting Periods and Methods, for more information about when you constructively receive income and accrual methods of accounting. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Types of Income The following are common types of rental income. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Advance rent. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   Advance rent is any amount you receive before the period that it covers. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Include advance rent in your rental income in the year you receive it regardless of the period covered or the method of accounting you use. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Example. Tax form 1040x more:label_tax_20form_201040x more:bizfinance On March 18, 2013, you signed a 10-year lease to rent your property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance During 2013, you received $9,600 for the first year's rent and $9,600 as rent for the last year of the lease. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You must include $19,200 in your rental income in the first year. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Canceling a lease. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   If your tenant pays you to cancel a lease, the amount you receive is rent. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Include the payment in your income in the year you receive it regardless of your method of accounting. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Expenses paid by tenant. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   If your tenant pays any of your expenses, those payments are rental income. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Because you must include this amount in income, you can also deduct the expenses if they are deductible rental expenses. Tax form 1040x more:label_tax_20form_201040x more:bizfinance For more information, see Rental Expenses , later. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Example 1. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Your tenant pays the water and sewage bill for your rental property and deducts the amount from the normal rent payment. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Under the terms of the lease, your tenant does not have to pay this bill. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Include the utility bill paid by the tenant and any amount received as a rent payment in your rental income. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You can deduct the utility payment made by your tenant as a rental expense. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Example 2. Tax form 1040x more:label_tax_20form_201040x more:bizfinance While you are out of town, the furnace in your rental property stops working. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Your tenant pays for the necessary repairs and deducts the repair bill from the rent payment. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Include the repair bill paid by the tenant and any amount received as a rent payment in your rental income. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You can deduct the repair payment made by your tenant as a rental expense. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Property or services. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   If you receive property or services as rent, instead of money, include the fair market value of the property or services in your rental income. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   If the services are provided at an agreed upon or specified price, that price is the fair market value unless there is evidence to the contrary. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Example. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Your tenant is a house painter. Tax form 1040x more:label_tax_20form_201040x more:bizfinance He offers to paint your rental property instead of paying 2 months rent. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You accept his offer. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Include in your rental income the amount the tenant would have paid for 2 months rent. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You can deduct that same amount as a rental expense for painting your property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Security deposits. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   Do not include a security deposit in your income when you receive it if you plan to return it to your tenant at the end of the lease. Tax form 1040x more:label_tax_20form_201040x more:bizfinance But if you keep part or all of the security deposit during any year because your tenant does not live up to the terms of the lease, include the amount you keep in your income in that year. Tax form 1040x more:label_tax_20form_201040x more:bizfinance    If an amount called a security deposit is to be used as a final payment of rent, it is advance rent. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Include it in your income when you receive it. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Other Sources of Rental Income Lease with option to buy. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   If the rental agreement gives your tenant the right to buy your rental property, the payments you receive under the agreement are generally rental income. Tax form 1040x more:label_tax_20form_201040x more:bizfinance If your tenant exercises the right to buy the property, the payments you receive for the period after the date of sale are considered part of the selling price. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Part interest. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   If you own a part interest in rental property, you must report your part of the rental income from the property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Rental of property also used as your home. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   If you rent property that you also use as your home and you rent it less than 15 days during the tax year, do not include the rent you receive in your income and do not deduct rental expenses. Tax form 1040x more:label_tax_20form_201040x more:bizfinance However, you can deduct on Schedule A (Form 1040), Itemized Deductions, the interest, taxes, and casualty and theft losses that are allowed for nonrental property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance See chapter 5, Personal Use of Dwelling Unit (Including Vacation Home). Tax form 1040x more:label_tax_20form_201040x more:bizfinance Rental Expenses In most cases, the expenses of renting your property, such as maintenance, insurance, taxes, and interest, can be deducted from your rental income. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Personal use of rental property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   If you sometimes use your rental property for personal purposes, you must divide your expenses between rental and personal use. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Also, your rental expense deductions may be limited. Tax form 1040x more:label_tax_20form_201040x more:bizfinance See chapter 5, Personal Use of Dwelling Unit (Including Vacation Home). Tax form 1040x more:label_tax_20form_201040x more:bizfinance Part interest. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   If you own a part interest in rental property, you can deduct expenses you paid according to your percentage of ownership. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Example. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Roger owns a one-half undivided interest in a rental house. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Last year he paid $968 for necessary repairs on the property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Roger can deduct $484 (50% × $968) as a rental expense. Tax form 1040x more:label_tax_20form_201040x more:bizfinance He is entitled to reimbursement for the remaining half from the co-owner. Tax form 1040x more:label_tax_20form_201040x more:bizfinance When To Deduct You generally deduct your rental expenses in the year you pay them. Tax form 1040x more:label_tax_20form_201040x more:bizfinance If you use the accrual method, see Publication 538 for more information. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Types of Expenses Listed below are the most common rental expenses. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Advertising. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Auto and travel expenses. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Cleaning and maintenance. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Commissions. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Depreciation. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Insurance. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Interest (other). Tax form 1040x more:label_tax_20form_201040x more:bizfinance Legal and other professional fees. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Local transportation expenses. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Management fees. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Mortgage interest paid to banks, etc. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Points. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Rental payments. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Repairs. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Taxes. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Utilities. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Some of these expenses, as well as other less common ones, are discussed below. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Depreciation. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   Depreciation is a capital expense. Tax form 1040x more:label_tax_20form_201040x more:bizfinance It is the mechanism for recovering your cost in an income producing property and must be taken over the expected life of the property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   You can begin to depreciate rental property when it is ready and available for rent. Tax form 1040x more:label_tax_20form_201040x more:bizfinance See Placed in Service under When Does Depreciation Begin and End in chapter 2. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Insurance premiums paid in advance. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   If you pay an insurance premium for more than one year in advance, for each year of coverage you can deduct the part of the premium payment that will apply to that year. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You cannot deduct the total premium in the year you pay it. Tax form 1040x more:label_tax_20form_201040x more:bizfinance See chapter 6 of Publication 535 for information on deductible premiums. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Interest expense. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   You can deduct mortgage interest you pay on your rental property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance When you refinance a rental property for more than the previous outstanding balance, the portion of the interest allocable to loan proceeds not related to rental use generally cannot be deducted as a rental expense. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Chapter 4 of Publication 535 explains mortgage interest in detail. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Expenses paid to obtain a mortgage. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   Certain expenses you pay to obtain a mortgage on your rental property cannot be deducted as interest. Tax form 1040x more:label_tax_20form_201040x more:bizfinance These expenses, which include mortgage commissions, abstract fees, and recording fees, are capital expenses that are part of your basis in the property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Form 1098, Mortgage Interest Statement. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   If you paid $600 or more of mortgage interest on your rental property to any one person, you should receive a Form 1098 or similar statement showing the interest you paid for the year. Tax form 1040x more:label_tax_20form_201040x more:bizfinance If you and at least one other person (other than your spouse if you file a joint return) were liable for, and paid interest on, the mortgage, and the other person received the Form 1098, report your share of the interest on Schedule E (Form 1040), line 13. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Attach a statement to your return showing the name and address of the other person. Tax form 1040x more:label_tax_20form_201040x more:bizfinance On the dotted line next to line 13, enter “See attached. Tax form 1040x more:label_tax_20form_201040x more:bizfinance ” Legal and other professional fees. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   You can deduct, as a rental expense, legal and other professional expenses such as tax return preparation fees you paid to prepare Schedule E, Part I. Tax form 1040x more:label_tax_20form_201040x more:bizfinance For example, on your 2013 Schedule E you can deduct fees paid in 2013 to prepare Part I of your 2012 Schedule E. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You can also deduct, as a rental expense, any expense (other than federal taxes and penalties) you paid to resolve a tax underpayment related to your rental activities. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Local benefit taxes. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   In most cases, you cannot deduct charges for local benefits that increase the value of your property, such as charges for putting in streets, sidewalks, or water and sewer systems. Tax form 1040x more:label_tax_20form_201040x more:bizfinance These charges are nondepreciable capital expenditures and must be added to the basis of your property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance However, you can deduct local benefit taxes that are for maintaining, repairing, or paying interest charges for the benefits. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Local transportation expenses. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   You may be able to deduct your ordinary and necessary local transportation expenses if you incur them to collect rental income or to manage, conserve, or maintain your rental property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance However, transportation expenses incurred to travel between your home and a rental property generally constitute nondeductible commuting costs unless you use your home as your principal place of business. Tax form 1040x more:label_tax_20form_201040x more:bizfinance See Publication 587, Business Use of Your Home, for information on determining if your home office qualifies as a principal place of business. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   Generally, if you use your personal car, pickup truck, or light van for rental activities, you can deduct the expenses using one of two methods: actual expenses or the standard mileage rate. Tax form 1040x more:label_tax_20form_201040x more:bizfinance For 2013, the standard mileage rate for business use is 56. Tax form 1040x more:label_tax_20form_201040x more:bizfinance 5 cents per mile. Tax form 1040x more:label_tax_20form_201040x more:bizfinance For more information, see chapter 4 of Publication 463. Tax form 1040x more:label_tax_20form_201040x more:bizfinance    To deduct car expenses under either method, you must keep records that follow the rules in chapter 5 of Publication 463. Tax form 1040x more:label_tax_20form_201040x more:bizfinance In addition, you must complete Form 4562, Part V, and attach it to your tax return. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Pre-rental expenses. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   You can deduct your ordinary and necessary expenses for managing, conserving, or maintaining rental property from the time you make it available for rent. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Rental of equipment. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   You can deduct the rent you pay for equipment that you use for rental purposes. Tax form 1040x more:label_tax_20form_201040x more:bizfinance However, in some cases, lease contracts are actually purchase contracts. Tax form 1040x more:label_tax_20form_201040x more:bizfinance If so, you cannot deduct these payments. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You can recover the cost of purchased equipment through depreciation. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Rental of property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   You can deduct the rent you pay for property that you use for rental purposes. Tax form 1040x more:label_tax_20form_201040x more:bizfinance If you buy a leasehold for rental purposes, you can deduct an equal part of the cost each year over the term of the lease. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Travel expenses. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   You can deduct the ordinary and necessary expenses of traveling away from home if the primary purpose of the trip is to collect rental income or to manage, conserve, or maintain your rental property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You must properly allocate your expenses between rental and nonrental activities. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You cannot deduct the cost of traveling away from home if the primary purpose of the trip is to improve the property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance The cost of improvements is recovered by taking depreciation. Tax form 1040x more:label_tax_20form_201040x more:bizfinance For information on travel expenses, see chapter 1 of Publication 463. Tax form 1040x more:label_tax_20form_201040x more:bizfinance    To deduct travel expenses, you must keep records that follow the rules in chapter 5 of Publication 463. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Uncollected rent. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   If you are a cash basis taxpayer, do not deduct uncollected rent. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Because you have not included it in your income, it is not deductible. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   If you use an accrual method, report income when you earn it. Tax form 1040x more:label_tax_20form_201040x more:bizfinance If you are unable to collect the rent, you may be able to deduct it as a business bad debt. Tax form 1040x more:label_tax_20form_201040x more:bizfinance See chapter 10 of Publication 535 for more information about business bad debts. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Vacant rental property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   If you hold property for rental purposes, you may be able to deduct your ordinary and necessary expenses (including depreciation) for managing, conserving, or maintaining the property while the property is vacant. Tax form 1040x more:label_tax_20form_201040x more:bizfinance However, you cannot deduct any loss of rental income for the period the property is vacant. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Vacant while listed for sale. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   If you sell property you held for rental purposes, you can deduct the ordinary and necessary expenses for managing, conserving, or maintaining the property until it is sold. Tax form 1040x more:label_tax_20form_201040x more:bizfinance If the property is not held out and available for rent while listed for sale, the expenses are not deductible rental expenses. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Points The term “points” is often used to describe some of the charges paid, or treated as paid, by a borrower to take out a loan or a mortgage. Tax form 1040x more:label_tax_20form_201040x more:bizfinance These charges are also called loan origination fees, maximum loan charges, or premium charges. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Any of these charges (points) that are solely for the use of money are interest. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Because points are prepaid interest, you generally cannot deduct the full amount in the year paid, but must deduct the interest over the term of the loan. Tax form 1040x more:label_tax_20form_201040x more:bizfinance The method used to figure the amount of points you can deduct each year follows the original issue discount (OID) rules. Tax form 1040x more:label_tax_20form_201040x more:bizfinance In this case, points are equivalent to OID, which is the difference between: The amount borrowed (redemption price at maturity, or principal) and The proceeds (issue price). Tax form 1040x more:label_tax_20form_201040x more:bizfinance The first step is to determine whether your total OID (which you may have on bonds or other investments in addition to the mortgage loan), including the OID resulting from the points, is insignificant or de minimis. Tax form 1040x more:label_tax_20form_201040x more:bizfinance If the OID is not de minimis, you must use the constant-yield method to figure how much you can deduct. Tax form 1040x more:label_tax_20form_201040x more:bizfinance De minimis OID. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   The OID is de minimis if it is less than one-fourth of 1% (. Tax form 1040x more:label_tax_20form_201040x more:bizfinance 0025) of the stated redemption price at maturity (principal amount of the loan) multiplied by the number of full years from the date of original issue to maturity (term of the loan). Tax form 1040x more:label_tax_20form_201040x more:bizfinance   If the OID is de minimis, you can choose one of the following ways to figure the amount of points you can deduct each year. Tax form 1040x more:label_tax_20form_201040x more:bizfinance On a constant-yield basis over the term of the loan. Tax form 1040x more:label_tax_20form_201040x more:bizfinance On a straight line basis over the term of the loan. Tax form 1040x more:label_tax_20form_201040x more:bizfinance In proportion to stated interest payments. Tax form 1040x more:label_tax_20form_201040x more:bizfinance In its entirety at maturity of the loan. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You make this choice by deducting the OID (points) in a manner consistent with the method chosen on your timely filed tax return for the tax year in which the loan is issued. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Example. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Carol Madison took out a $100,000 mortgage loan on January 1, 2013, to buy a house she will use as a rental during 2013. Tax form 1040x more:label_tax_20form_201040x more:bizfinance The loan is to be repaid over 30 years. Tax form 1040x more:label_tax_20form_201040x more:bizfinance During 2013, Carol paid $10,000 of mortgage interest (stated interest) to the lender. Tax form 1040x more:label_tax_20form_201040x more:bizfinance When the loan was made, she paid $1,500 in points to the lender. Tax form 1040x more:label_tax_20form_201040x more:bizfinance The points reduced the principal amount of the loan from $100,000 to $98,500, resulting in $1,500 of OID. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Carol determines that the points (OID) she paid are de minimis based on the following computation. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Redemption price at maturity (principal amount of the loan) $100,000 Multiplied by: The term of the  loan in complete years ×30 Multiplied by ×. Tax form 1040x more:label_tax_20form_201040x more:bizfinance 0025 De minimis amount $7,500 The points (OID) she paid ($1,500) are less than the de minimis amount ($7,500). Tax form 1040x more:label_tax_20form_201040x more:bizfinance Therefore, Carol has de minimis OID and she can choose one of the four ways discussed earlier to figure the amount she can deduct each year. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Under the straight line method, she can deduct $50 each year for 30 years. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Constant-yield method. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   If the OID is not de minimis, you must use the constant-yield method to figure how much you can deduct each year. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   You figure your deduction for the first year in the following manner. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Determine the issue price of the loan. Tax form 1040x more:label_tax_20form_201040x more:bizfinance If you paid points on the loan, the issue price generally is the difference between the principal and the points. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Multiply the result in (1) by the yield to maturity (defined later). Tax form 1040x more:label_tax_20form_201040x more:bizfinance Subtract any qualified stated interest payments (defined later) from the result in (2). Tax form 1040x more:label_tax_20form_201040x more:bizfinance This is the OID you can deduct in the first year. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Yield to maturity (YTM). Tax form 1040x more:label_tax_20form_201040x more:bizfinance   This rate is generally shown in the literature you receive from your lender. Tax form 1040x more:label_tax_20form_201040x more:bizfinance If you do not have this information, consult your lender or tax advisor. Tax form 1040x more:label_tax_20form_201040x more:bizfinance In general, the YTM is the discount rate that, when used in computing the present value of all principal and interest payments, produces an amount equal to the principal amount of the loan. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Qualified stated interest (QSI). Tax form 1040x more:label_tax_20form_201040x more:bizfinance   In general, this is the stated interest that is unconditionally payable in cash or property (other than another loan of the issuer) at least annually over the term of the loan at a fixed rate. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Example—Year 1. Tax form 1040x more:label_tax_20form_201040x more:bizfinance The facts are the same as in the previous example. Tax form 1040x more:label_tax_20form_201040x more:bizfinance The yield to maturity on Carol's loan is 10. Tax form 1040x more:label_tax_20form_201040x more:bizfinance 2467%, compounded annually. Tax form 1040x more:label_tax_20form_201040x more:bizfinance She figured the amount of points (OID) she could deduct in 2013 as follows. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Principal amount of the loan $100,000 Minus: Points (OID) –1,500 Issue price of the loan $98,500 Multiplied by: YTM × . Tax form 1040x more:label_tax_20form_201040x more:bizfinance 102467 Total 10,093 Minus: QSI –10,000 Points (OID) deductible in 2013 $93 To figure your deduction in any subsequent year, you start with the adjusted issue price. Tax form 1040x more:label_tax_20form_201040x more:bizfinance To get the adjusted issue price, add to the issue price figured in Year 1 any OID previously deducted. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Then follow steps (2) and (3), earlier. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Example—Year 2. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Carol figured the deduction for 2014 as follows. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Issue price $98,500 Plus: Points (OID) deducted  in 2013 +93 Adjusted issue price $98,593 Multiplied by: YTM × . Tax form 1040x more:label_tax_20form_201040x more:bizfinance 102467 Total 10,103 Minus: QSI –10,000 Points (OID) deductible in 2014 $103 Loan or mortgage ends. Tax form 1040x more:label_tax_20form_201040x more:bizfinance    If your loan or mortgage ends, you may be able to deduct any remaining points (OID) in the tax year in which the loan or mortgage ends. Tax form 1040x more:label_tax_20form_201040x more:bizfinance A loan or mortgage may end due to a refinancing, prepayment, foreclosure, or similar event. Tax form 1040x more:label_tax_20form_201040x more:bizfinance However, if the refinancing is with the same lender, the remaining points (OID) generally are not deductible in the year in which the refinancing occurs, but may be deductible over the term of the new mortgage or loan. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Points when loan refinance is more than the previous outstanding balance. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   When you refinance a rental property for more than the previous outstanding balance, the portion of the points allocable to loan proceeds not related to rental use generally cannot be deducted as a rental expense. Tax form 1040x more:label_tax_20form_201040x more:bizfinance For example, if an individual refinanced a loan with a balance of $100,000, the amount of the new loan was $120,000, and the taxpayer used $20,000 to purchase a car, points allocable to the $20,000 would be treated as nondeductible personal interest. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Repairs and Improvements Generally, an expense for repairing or maintaining your rental property may be deducted if you are not required to capitalize the expense. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Improvements. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   You must capitalize any expense you pay to improve your rental property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance An expense is for an improvement if it results in a betterment to your property, restores your property, or adapts your property to a new or different use. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Betterments. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   Expenses that may result in a betterment to your property include expenses for fixing a pre-existing defect or condition, enlarging or expanding your property, or increasing the capacity, strength, or quality of your property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Restoration. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   Expenses that may be for restoration include expenses for replacing a substantial structural part of your property, repairing damage to your property after you properly adjusted the basis of your property as a result of a casualty loss, or rebuilding your property to a like-new condition. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Adaptation. Tax form 1040x more:label_tax_20form_201040x more:bizfinance   Expenses that may be for adaptation include expenses for altering your property to a use that is not consistent with the intended ordinary use of your property when you began renting the property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Separate the costs of repairs and improvements, and keep accurate records. Tax form 1040x more:label_tax_20form_201040x more:bizfinance You will need to know the cost of improvements when you sell or depreciate your property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance The expenses you capitalize for improving your property can generally be depreciated as if the improvement were separate property. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Table 1-1. Tax form 1040x more:label_tax_20form_201040x more:bizfinance Examples of Improvements Additions Bedroom Bathroom Deck Garage Porch Patio  Lawn & Grounds Landscaping Driveway Walkway Fence Retaining wall Sprinkler system Swimming pool Miscellaneous Storm windows, doors New roof Central vacuum Wiring upgrades Satellite dish Security system   Heating & Air Conditioning Heating system Central air conditioning Furnace Duct work Central humidifier Filtration system Plumbing Septic system Water heater Soft water system Filtration system  Interior Improvements Built-in appliances Kitchen modernization Flooring Wall-to-wall carpeting  Insulation Attic Walls, floor Pipes, duct work Prev  Up  Next   Home   More Online Publications