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Turbotax 2011

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Turbotax 2011

Turbotax 2011 Publication 584 - Additional Material Table of Contents This image is too large to be displayed in the current screen. Turbotax 2011 Please click the link to view the image. Turbotax 2011 Entrance Hall This image is too large to be displayed in the current screen. Turbotax 2011 Please click the link to view the image. Turbotax 2011 Living Room This image is too large to be displayed in the current screen. Turbotax 2011 Please click the link to view the image. Turbotax 2011 Dining Room This image is too large to be displayed in the current screen. Turbotax 2011 Please click the link to view the image. Turbotax 2011 Kitchen This image is too large to be displayed in the current screen. Turbotax 2011 Please click the link to view the image. Turbotax 2011 Den This image is too large to be displayed in the current screen. Turbotax 2011 Please click the link to view the image. Turbotax 2011 Bedrooms This image is too large to be displayed in the current screen. Turbotax 2011 Please click the link to view the image. Turbotax 2011 Bathrooms This image is too large to be displayed in the current screen. Turbotax 2011 Please click the link to view the image. Turbotax 2011 Recreation Room This image is too large to be displayed in the current screen. Turbotax 2011 Please click the link to view the image. Turbotax 2011 Laundry and Basement This image is too large to be displayed in the current screen. Turbotax 2011 Please click the link to view the image. Turbotax 2011 Garage This image is too large to be displayed in the current screen. Turbotax 2011 Please click the link to view the image. Turbotax 2011 Sporting Equipment This image is too large to be displayed in the current screen. Turbotax 2011 Please click the link to view the image. Turbotax 2011 Men's Clothing This image is too large to be displayed in the current screen. Turbotax 2011 Please click the link to view the image. Turbotax 2011 Women's Clothing This image is too large to be displayed in the current screen. Turbotax 2011 Please click the link to view the image. Turbotax 2011 Children's Clothing This image is too large to be displayed in the current screen. Turbotax 2011 Please click the link to view the image. Turbotax 2011 Jewelry This image is too large to be displayed in the current screen. Turbotax 2011 Please click the link to view the image. Turbotax 2011 Electrical Appliances This image is too large to be displayed in the current screen. Turbotax 2011 Please click the link to view the image. Turbotax 2011 Linens This image is too large to be displayed in the current screen. Turbotax 2011 Please click the link to view the image. Turbotax 2011 Miscellaneous This image is too large to be displayed in the current screen. Turbotax 2011 Please click the link to view the image. Turbotax 2011 Motor Vehicles Schedule 20. Turbotax 2011 Home (Excluding Contents) Note. Turbotax 2011 If you used the entire property as your home, fill out only column (a). Turbotax 2011 If you used part of the property as your home and part of it for business or to produce rental income, you must allocate the entries on lines 2-9 between the personal part (column (a)) and the business/rental part (column (b)). Turbotax 2011 1. Turbotax 2011 Description of property (Show location and date acquired. Turbotax 2011 )     (a)  Personal Part (b)  Business/Rental Part 2. Turbotax 2011 Cost or other (adjusted) basis of property (from Worksheet A)     3. Turbotax 2011 Insurance or other reimbursement Note. Turbotax 2011 If line 2 is more than line 3, skip line 4. Turbotax 2011 If line 3 is more than line 2, you exclude gain, and the gain is more than you can exclude, see the instructions for line 3 in the Instructions for Form 4684 for the amount to enter. Turbotax 2011     4. Turbotax 2011 Gain from casualty. Turbotax 2011 If line 3 is more than line 2, enter the difference here and skip lines 5 through 9. Turbotax 2011 But see Next below line 9. Turbotax 2011     5. Turbotax 2011 Fair market value before casualty     6. Turbotax 2011 Fair market value after casualty     7. Turbotax 2011 Decrease in fair market value. Turbotax 2011 Subtract line 6 from line 5. Turbotax 2011     8. Turbotax 2011 Enter the smaller of line 2 or line 7 Note for business/rental part. Turbotax 2011 If the property was totally destroyed by casualty, enter on line 8, column (b) the amount from line 2, column (b). Turbotax 2011     9. Turbotax 2011 Subtract line 3 from line 8. Turbotax 2011 If zero or less, enter -0-. Turbotax 2011     Next: Transfer the entries from line 1 and lines 2-9, column (a), above to the corresponding lines on Form 4684, Section A. Turbotax 2011 Transfer the entries from line 1 and lines 2-9, column (b), to the corresponding lines on Form 4684, Section B. Turbotax 2011 Worksheet A. Turbotax 2011 Cost or Other (Adjusted) Basis Caution. Turbotax 2011 See the Worksheet A Instructions before you use this worksheet. Turbotax 2011         (a) Personal Part (b) Business/Rental Part 1. Turbotax 2011   Enter the purchase price of the home damaged or destroyed. Turbotax 2011 (If you filed Form 2119 when you originally acquired that home to postpone gain on the sale of a previous home before May 7, 1997, enter the adjusted basis of the new home from that Form 2119. Turbotax 2011 ) 1. Turbotax 2011     2. Turbotax 2011   Seller paid points for home bought after 1990. Turbotax 2011 Do not include any seller-paid points you already subtracted to arrive at the amount entered on line 1 2. Turbotax 2011     3. Turbotax 2011   Subtract line 2 from line 1 3. Turbotax 2011     4. Turbotax 2011   Settlement fees or closing costs. Turbotax 2011 (See Settlement costs in Publication 551. Turbotax 2011 ) If line 1 includes the adjusted basis of the new home from Form 2119, skip lines 4a-4g and 5; go to line 6. Turbotax 2011         a. Turbotax 2011 Abstract and recording fees 4a. Turbotax 2011       b. Turbotax 2011 Legal fees (including fees for title search and preparing documents) 4b. Turbotax 2011       c. Turbotax 2011 Survey fees 4c. Turbotax 2011       d. Turbotax 2011 Title insurance 4d. Turbotax 2011       e. Turbotax 2011 Transfer or stamp taxes 4e. Turbotax 2011       f. Turbotax 2011 Amounts that the seller owed that you agreed to pay (back taxes or interest, recording or mortgage fees, and sales commissions) 4f. Turbotax 2011       g. Turbotax 2011 Other 4g. Turbotax 2011     5. Turbotax 2011   Add lines 4a through 4g 5. Turbotax 2011     6. Turbotax 2011   Cost of additions and improvements. Turbotax 2011 (See Increases to Basis in Publication 551. Turbotax 2011 ) Do not include any additions and improvements included on line 1 6. Turbotax 2011     7. Turbotax 2011   Special tax assessments paid for local improvements, such as streets and sidewalks 7. Turbotax 2011     8. Turbotax 2011   Other increases to basis 8. Turbotax 2011     9. Turbotax 2011   Add lines 3, 5, 6, 7, and 8 9. Turbotax 2011     10. Turbotax 2011   Depreciation allowed or allowable, related to the business use or rental of the home 10. Turbotax 2011 0   11. Turbotax 2011   Other decreases to basis (See Decreases to Basis in Publication 551. Turbotax 2011 ) 11. Turbotax 2011     12. Turbotax 2011   Add lines 10 and 11 12. Turbotax 2011     13. Turbotax 2011   Cost or other (adjusted) basis of home damaged or destroyed. Turbotax 2011 Subtract line 12 from line 9. Turbotax 2011 Enter here and on Schedule 20, line 2 13. Turbotax 2011     Worksheet A Instructions. Turbotax 2011 If you use Worksheet A to figure the cost or other (adjusted) basis of your home, follow these instructions. Turbotax 2011 DO NOT use this worksheet to determine your basis if you acquired an interest in your home from a decedent who died in 2010 and whose executor filed Form 8939. Turbotax 2011 IF. Turbotax 2011 . Turbotax 2011 . Turbotax 2011   THEN. Turbotax 2011 . Turbotax 2011 . Turbotax 2011 you inherited your home from a decedent who died either before or after 2010 or from a decedent who died in 2010 and whose executor did not file Form 8939. Turbotax 2011 1 skip lines 1–4 of the worksheet. Turbotax 2011 2 find your basis using the rules under Inherited Property in Publication 551. Turbotax 2011 Enter this amount on line 5 of the worksheet. Turbotax 2011 3 fill out lines 6–13 of the worksheet. Turbotax 2011 you received your home as a gift 1 read Property Received as a Gift in Publication 551 and enter on lines 1 and 3 of the worksheet either the donor's adjusted basis or the home's fair market value at the time of the gift, whichever is appropriate. Turbotax 2011 2 if you can add any federal gift tax to your basis, enter that amount on line 5 of the worksheet. Turbotax 2011 3 fill out the rest of the worksheet. Turbotax 2011 you received your home as a trade for other property 1 enter on line 1 of the worksheet the fair market value of the other property at the time of the trade. Turbotax 2011 (But if you received your home as a trade for your previous home before May 7, 1997, and had a gain on the trade that you postponed using Form 2119, enter on line 1 of the worksheet the adjusted basis of the new home from that Form 2119. Turbotax 2011 ) 2 fill out the rest of the worksheet. Turbotax 2011 you built your home 1 add the purchase price of the land and the cost of building the home. Turbotax 2011 Enter that total on line 1 of the worksheet. Turbotax 2011 (However, if you filed a Form 2119 to postpone gain on the sale of a previous home before May 7, 1997, enter on line 1 of the worksheet the adjusted basis of the new home from that Form 2119. Turbotax 2011 ) 2 fill out the rest of the worksheet. Turbotax 2011 you received your home from your spouse after July 18, 1984 1 skip lines 1–4 of the worksheet. Turbotax 2011 2 enter on line 5 of the worksheet your spouse's cost or other (adjusted) basis in the home just before you received it. Turbotax 2011 3 fill out lines 6–13 of the worksheet, making adjustments to basis only for events after the transfer. Turbotax 2011 you owned a home jointly with your spouse, who transferred his or her interest in the home to you after July 18, 1984     fill out one worksheet, making adjustments to basis for events both before and after the transfer. Turbotax 2011   you received your home from your spouse before July 19, 1984 1 skip lines 1–4 of the worksheet. Turbotax 2011 2 enter on line 5 of the worksheet the home's fair market value at the time you received it. Turbotax 2011 3 fill out lines 6–13 of the worksheet, making adjustments to basis only for events after the transfer. Turbotax 2011 you owned a home jointly with your spouse, and your spouse transferred his or her interest in the home to you before July 19, 1984 1 fill out a worksheet, lines 1–13, making adjustments to basis only for events before the transfer. Turbotax 2011 2 multiply the amount on line 13 of that worksheet by 50% (0. Turbotax 2011 50) to get the adjusted basis of your half-interest at the time of the transfer. Turbotax 2011 3 multiply the fair market value of the home at the time of the transfer by 50% (0. Turbotax 2011 50). Turbotax 2011 Generally, this is the basis of the half-interest that your spouse owned. Turbotax 2011 4 add the amounts from steps 2 and 3 and enter the total on line 5 of a second worksheet. Turbotax 2011 5 complete lines 6–13 of the second worksheet, making adjustments to basis only for events after the transfer. Turbotax 2011 you owned your home jointly with a nonspouse 1 fill out lines 1–13 of the worksheet. Turbotax 2011 2 multiply the amount on line 13 by your percentage of ownership to get the adjusted basis of your part-interest. Turbotax 2011 Worksheet A Instructions. Turbotax 2011 (Continued) IF. Turbotax 2011 . Turbotax 2011 . Turbotax 2011   THEN. Turbotax 2011 . Turbotax 2011 . Turbotax 2011 you owned your home jointly with your spouse who died before 2010 and before the casualty 1 fill out a worksheet, lines 1–13, including adjustments to basis only for events before your spouse's death. Turbotax 2011 2 multiply the amount on line 13 of that worksheet by 50% (0. Turbotax 2011 50) to get the adjusted basis of your half-interest on the date of death. Turbotax 2011 3 figure the basis for the half-interest owned by your spouse. Turbotax 2011 This is one-half of the fair market value on the date of death (or later alternate valuation used for estate or inheritance tax). Turbotax 2011 (The basis in your half will remain one-half of the adjusted basis determined in step 2. Turbotax 2011 ) 4 add the amounts from steps 2 and 3 and enter the total on line 5 of a second worksheet. Turbotax 2011 5 complete lines 6–13 of the second worksheet, making adjustments to basis only for events after your spouse's death. Turbotax 2011 you owned your home jointly with your spouse who died before 2010 and before the casualty, and your permanent legal home is in a community property state 1 skip lines 1–4 of the worksheet. Turbotax 2011 2 enter the amount of your basis on line 5 of the worksheet. Turbotax 2011 Generally, this is the fair market value of the home at the time of death. Turbotax 2011 (But see Community Property in Publication 551 for special rules. Turbotax 2011 ) 3 fill out lines 6–13 of the worksheet, making adjustments to basis only for events after your spouse's death. Turbotax 2011 you owned your home jointly with a nonspouse who died before 2010 and before the casualty 1 fill out lines 1–13 of the worksheet, including adjustments to basis only for events before the co-owner's death. Turbotax 2011 2 multiply the amount on line 13 by your percentage of ownership to get the adjusted basis of your part-interest on the date of death. Turbotax 2011 3 multiply the fair market value on the date of death (or later alternate valuation used for estate or inheritance tax) by the co-owner's percentage of ownership. Turbotax 2011 This is the basis for the co-owner's part-interest. Turbotax 2011 4 add the amounts from steps 2 and 3 and enter the total on line 5 of a second worksheet. Turbotax 2011 5 complete lines 6–13 of the second worksheet, including adjustments to basis only for events after the co-owner's death. Turbotax 2011 your home was ever damaged as a result of a prior casualty 1 on line 8 of the worksheet, enter any amounts you spent to restore the home to its condition before the prior casualty. Turbotax 2011 2 on line 11 enter: any insurance reimbursements you received (or expect to receive) for the prior loss,  and any deductible casualty losses from prior years not covered by insurance. Turbotax 2011 the person who sold you your home paid points on your loan and you bought your home after 1990 but before April 4, 1994. Turbotax 2011   on line 2 enter the seller-paid points only if you deducted them as home mortgage interest in the year paid (unless you used the seller-paid points to reduce the amount on line 1). Turbotax 2011 the person who sold you your home paid points on your loan and you bought your home after April 3, 1994   on line 2 enter the seller-paid points even if you did not deduct them (unless you used the seller-paid points to reduce the amount on line 1). Turbotax 2011 you used part of the property as your home and part of it for business or to produce rental income   you must allocate the entries on Worksheet A between the personal part (column (a)) and the business/rental part (column (b)). Turbotax 2011 none of these items apply   fill out the entire worksheet. Turbotax 2011 Prev  Up  Next   Home   More Online Publications
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Understanding Tax Return Preparer Credentials

For 2014, any tax professional with an IRS Preparer Tax Identification Number is authorized to prepare federal tax returns. Tax professionals, however, have differing levels of skills, education and expertise. There are several different types of return preparers with credentials.

An important difference in the types of practitioners is “representation rights”. Here is guidance on each credential:

UNLIMITED REPRESENTATION RIGHTS: Enrolled agents, certified public accountants, and attorneys have unlimited representation rights before the IRS and may represent their clients on any matters including audits, payment/collection issues, and appeals.

Enrolled Agents – People with this credential are licensed by the IRS and specifically trained in federal tax planning, preparation and representation. Enrolled agents hold the most expansive license IRS grants and must pass a suitability check, as well as a three-part Special Enrollment Examination, a comprehensive exam that covers individual tax, business tax and representation issues. They complete 72 hours of continuing education every 3 years. For more information on enrolled agents, see Publication 4693-A, A Guide to the Enrolled Agent Program.

Certified Public Accountants – People with this credential are licensed by state boards of accountancy, the District of Columbia, and U.S. territories, and have passed the Uniform CPA Examination. They also must meet education, experience, and good character requirements established by their boards of accountancy. In addition, CPAs must comply with ethical requirements as well as complete specified levels of continuing education in order to maintain an active CPA license. CPAs can offer a range of services; some CPAs specialize in tax preparation and planning.

Attorneys – People with this credential are licensed by state courts or their designees, such as the state bar. Generally, requirements include completion of a degree in law, passage of an ethics and bar exam and on-going continuing education. Attorneys can offer a range of services; some attorneys specialize in tax preparation and planning.

LIMITED REPRESENTATION RIGHTS: Preparers without any of the above credentials (also known as “unenrolled preparers”) have limited practice rights and may only represent clients whose returns they prepared and signed and only at the initial audit level.

NOTE: Registered Tax Return Preparers – Certain preparers became RTRPs under an IRS program that IRS is no longer able to enforce due to a District Court injunction. RTRPs passed an IRS competency test on Form 1040 tax preparation.

REMINDER: Everyone described above must have an IRS issued preparer tax identification number (PTIN) in order to legally prepare your tax return for compensation. Make certain your preparer has one and enters it on your return filed with the IRS. They are not required to enter it on the copy they provide you.

Page Last Reviewed or Updated: 10-Feb-2014

The Turbotax 2011

Turbotax 2011 5. Turbotax 2011   Personal Use of Dwelling Unit (Including Vacation Home) Table of Contents Dividing Expenses Dwelling Unit Used as a HomeMain home. Turbotax 2011 Shared equity financing agreement. Turbotax 2011 Donation of use of the property. Turbotax 2011 Examples. Turbotax 2011 Days used for repairs and maintenance. Turbotax 2011 Days used as a main home before or after renting. Turbotax 2011 Reporting Income and DeductionsNot used as a home. Turbotax 2011 Used as a home but rented less than 15 days. Turbotax 2011 Used as a home and rented 15 days or more. Turbotax 2011 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. Turbotax 2011 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. Turbotax 2011 Only your rental expenses may deducted on Schedule E (Form 1040). Turbotax 2011 Some of your personal expenses may be deductible if you itemize your deductions on Schedule A (Form 1040). Turbotax 2011 You must also determine if the dwelling unit is considered a home. Turbotax 2011 The amount of rental expenses that you can deduct may be limited if the dwelling unit is considered a home. Turbotax 2011 Whether a dwelling unit is considered a home depends on how many days during the year are considered to be days of personal use. Turbotax 2011 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. Turbotax 2011 Dwelling unit. Turbotax 2011   A dwelling unit includes a house, apartment, condominium, mobile home, boat, vacation home, or similar property. Turbotax 2011 It also includes all structures or other property belonging to the dwelling unit. Turbotax 2011 A dwelling unit has basic living accommodations, such as sleeping space, a toilet, and cooking facilities. Turbotax 2011   A dwelling unit does not include property (or part of the property) used solely as a hotel, motel, inn, or similar establishment. Turbotax 2011 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. Turbotax 2011 Example. Turbotax 2011 You rent a room in your home that is always available for short-term occupancy by paying customers. Turbotax 2011 You do not use the room yourself and you allow only paying customers to use the room. Turbotax 2011 This room is used solely as a hotel, motel, inn, or similar establishment and is not a dwelling unit. Turbotax 2011 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. Turbotax 2011 When dividing your expenses, follow these rules. Turbotax 2011 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. Turbotax 2011 (This rule does not apply when determining whether you used the unit as a home. Turbotax 2011 ) Any day that the unit is available for rent but not actually rented is not a day of rental use. Turbotax 2011 Fair rental price. Turbotax 2011   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. Turbotax 2011 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. Turbotax 2011   Ask yourself the following questions when comparing another property with yours. Turbotax 2011 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. Turbotax 2011 Example. Turbotax 2011 Your beach cottage was available for rent from June 1 through August 31 (92 days). Turbotax 2011 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. Turbotax 2011 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. Turbotax 2011 Your family also used the cottage during the last 2 weeks of May (14 days). Turbotax 2011 The cottage was not used at all before May 17 or after August 31. Turbotax 2011 You figure the part of the cottage expenses to treat as rental expenses as follows. Turbotax 2011 The cottage was used for rental a total of 85 days (92 − 7). Turbotax 2011 The days it was available for rent but not rented (7 days) are not days of rental use. Turbotax 2011 The July weekend (2 days) you used it is rental use because you received a fair rental price for the weekend. Turbotax 2011 You used the cottage for personal purposes for 14 days (the last 2 weeks in May). Turbotax 2011 The total use of the cottage was 99 days (14 days personal use + 85 days rental use). Turbotax 2011 Your rental expenses are 85/99 (86%) of the cottage expenses. Turbotax 2011 Note. Turbotax 2011 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. Turbotax 2011 Therefore, you had 16 days of personal use and 83 days of rental use for this purpose. Turbotax 2011 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. Turbotax 2011 If you have a net loss, you may not be able to deduct all of the rental expenses. Turbotax 2011 See Dwelling Unit Used as a Home, next. Turbotax 2011 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. Turbotax 2011 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. Turbotax 2011 See What is a day of personal use , later. Turbotax 2011 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. Turbotax 2011 Instead, count it as a day of personal use in applying both (1) and (2) above. Turbotax 2011 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. Turbotax 2011 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). Turbotax 2011 However, see Days used as a main home before or after renting , later. Turbotax 2011 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. Turbotax 2011 Family includes only your spouse, brothers and sisters, half-brothers and half-sisters, ancestors (parents, grandparents, etc. Turbotax 2011 ), and lineal descendants (children, grandchildren, etc. Turbotax 2011 ). Turbotax 2011 Anyone under an arrangement that lets you use some other dwelling unit. Turbotax 2011 Anyone at less than a fair rental price. Turbotax 2011 Main home. Turbotax 2011   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. Turbotax 2011 Shared equity financing agreement. Turbotax 2011   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. Turbotax 2011 Donation of use of the property. Turbotax 2011   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. Turbotax 2011 Examples. Turbotax 2011   The following examples show how to determine if you have days of personal use. Turbotax 2011 Example 1. Turbotax 2011 You and your neighbor are co-owners of a condominium at the beach. Turbotax 2011 Last year, you rented the unit to vacationers whenever possible. Turbotax 2011 The unit was not used as a main home by anyone. Turbotax 2011 Your neighbor used the unit for 2 weeks last year; you did not use it at all. Turbotax 2011 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. Turbotax 2011 Example 2. Turbotax 2011 You and your neighbors are co-owners of a house under a shared equity financing agreement. Turbotax 2011 Your neighbors live in the house and pay you a fair rental price. Turbotax 2011 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. Turbotax 2011 This is because your neighbors rent the house as their main home under a shared equity financing agreement. Turbotax 2011 Example 3. Turbotax 2011 You own a rental property that you rent to your son. Turbotax 2011 Your son does not own any interest in this property. Turbotax 2011 He uses it as his main home and pays you a fair rental price. Turbotax 2011 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. Turbotax 2011 Example 4. Turbotax 2011 You rent your beach house to Rosa. Turbotax 2011 Rosa rents her cabin in the mountains to you. Turbotax 2011 You each pay a fair rental price. Turbotax 2011 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. Turbotax 2011 Example 5. Turbotax 2011 You rent an apartment to your mother at less than a fair rental price. Turbotax 2011 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. Turbotax 2011 Days used for repairs and maintenance. Turbotax 2011   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. Turbotax 2011 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. Turbotax 2011 Example. Turbotax 2011 Corey owns a cabin in the mountains that he rents for most of the year. Turbotax 2011 He spends a week at the cabin with family members. Turbotax 2011 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. Turbotax 2011 Corey's family members, however, work substantially full time on the cabin each day during the week. Turbotax 2011 The main purpose of being at the cabin that week is to do maintenance work. Turbotax 2011 Therefore, the use of the cabin during the week by Corey and his family will not be considered personal use by Corey. Turbotax 2011 Days used as a main home before or after renting. Turbotax 2011   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. Turbotax 2011 Do not count them as days of personal use if: You rented or tried to rent the property for 12 or more consecutive months. Turbotax 2011 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. Turbotax 2011 However, this special rule does not apply when dividing expenses between rental and personal use. Turbotax 2011 See Property Changed to Rental Use in chapter 4. Turbotax 2011 Example 1. Turbotax 2011 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. Turbotax 2011 You rented your house at a fair rental price from March 15, 2012, to May 14, 2013 (14 months). Turbotax 2011 On June 1, 2013, you moved back into your old house. Turbotax 2011 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. Turbotax 2011 Therefore, you would use the rules in chapter 1 when figuring your rental income and expenses. Turbotax 2011 Example 2. Turbotax 2011 On January 31, you moved out of the condominium where you had lived for 3 years. Turbotax 2011 You offered it for rent at a fair rental price beginning on February 1. Turbotax 2011 You were unable to rent it until April. Turbotax 2011 On September 15, you sold the condominium. Turbotax 2011 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. Turbotax 2011 Examples. Turbotax 2011   The following examples show how to determine whether you used your rental property as a home. Turbotax 2011 Example 1. Turbotax 2011 You converted the basement of your home into an apartment with a bedroom, a bathroom, and a small kitchen. Turbotax 2011 You rented the basement apartment at a fair rental price to college students during the regular school year. Turbotax 2011 You rented to them on a 9-month lease (273 days). Turbotax 2011 You figured 10% of the total days rented to others at a fair rental price is 27 days. Turbotax 2011 During June (30 days), your brothers stayed with you and lived in the basement apartment rent free. Turbotax 2011 Your basement apartment was used as a home because you used it for personal purposes for 30 days. Turbotax 2011 Rent-free use by your brothers is considered personal use. Turbotax 2011 Your personal use (30 days) is more than the greater of 14 days or 10% of the total days it was rented (27 days). Turbotax 2011 Example 2. Turbotax 2011 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). Turbotax 2011 Your sister-in-law stayed in the room, rent free, for the last 3 weeks (21 days) in July. Turbotax 2011 You figured 10% of the total days rented to others at a fair rental price is 3 days. Turbotax 2011 The room was used as a home because you used it for personal purposes for 21 days. Turbotax 2011 That is more than the greater of 14 days or 10% of the 27 days it was rented (3 days). Turbotax 2011 Example 3. Turbotax 2011 You own a condominium apartment in a resort area. Turbotax 2011 You rented it at a fair rental price for a total of 170 days during the year. Turbotax 2011 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. Turbotax 2011 Your family actually used the apartment for 10 of those days. Turbotax 2011 Therefore, the apartment is treated as having been rented for 160 (170 – 10) days. Turbotax 2011 You figured 10% of the total days rented to others at a fair rental price is 16 days. Turbotax 2011 Your family also used the apartment for 7 other days during the year. Turbotax 2011 You used the apartment as a home because you used it for personal purposes for 17 days. Turbotax 2011 That is more than the greater of 14 days or 10% of the 160 days it was rented (16 days). Turbotax 2011 Minimal rental use. Turbotax 2011   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. Turbotax 2011 See Used as a home but rented less than 15 days, later, for more information. Turbotax 2011 Limit on deductions. Turbotax 2011   Renting a dwelling unit that is considered a home is not a passive activity. Turbotax 2011 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. Turbotax 2011 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. Turbotax 2011 Any expenses carried forward to the next year will be subject to any limits that apply for that year. Turbotax 2011 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. Turbotax 2011   To figure your deductible rental expenses for this year and any carryover to next year, use Worksheet 5–1. Turbotax 2011 Reporting Income and Deductions Property not used for personal purposes. Turbotax 2011   If you do not use a dwelling unit for personal purposes, see chapter 3 for how to report your rental income and expenses. Turbotax 2011 Property used for personal purposes. Turbotax 2011   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. Turbotax 2011 Not used as a home. Turbotax 2011   If you use a dwelling unit for personal purposes, but not as a home, report all the rental income in your income. Turbotax 2011 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 . Turbotax 2011 The expenses for personal use are not deductible as rental expenses. Turbotax 2011   Your deductible rental expenses can be more than your gross rental income; however, see Limits on Rental Losses in chapter 3. Turbotax 2011 Used as a home but rented less than 15 days. Turbotax 2011   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). Turbotax 2011 You are not required to report the rental income and rental expenses from this activity. Turbotax 2011 The expenses, including qualified mortgage interest, property taxes, and any qualified casualty loss will be reported as normally allowed on Schedule A (Form 1040). Turbotax 2011 See the Instructions for Schedule A (Form 1040) for more information on deducting these expenses. Turbotax 2011 Used as a home and rented 15 days or more. Turbotax 2011   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. Turbotax 2011 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 . Turbotax 2011 The expenses for personal use are not deductible as rental expenses. Turbotax 2011   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. Turbotax 2011 You do not need to use Worksheet 5-1. Turbotax 2011   However, if you had a net loss from renting the dwelling unit for the year, your deduction for certain rental expenses is limited. Turbotax 2011 To figure your deductible rental expenses and any carryover to next year, use Worksheet 5–1. Turbotax 2011 Worksheet 5-1. Turbotax 2011 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. Turbotax 2011 Did you use the dwelling unit as a home this year? (See Dwelling Unit Used as a Home . Turbotax 2011 ) 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. Turbotax 2011 Rental Use Percentage A. Turbotax 2011 Total days available for rent at fair rental price A. Turbotax 2011       B. Turbotax 2011 Total days available for rent (line A) but not rented B. Turbotax 2011       C. Turbotax 2011 Total days of rental use. Turbotax 2011 Subtract line B from line A C. Turbotax 2011       D. Turbotax 2011 Total days of personal use (including days rented at less than fair rental price) D. Turbotax 2011       E. Turbotax 2011 Total days of rental and personal use. Turbotax 2011 Add lines C and D E. Turbotax 2011       F. Turbotax 2011 Percentage of expenses allowed for rental. Turbotax 2011 Divide line C by line E     F. Turbotax 2011 . Turbotax 2011 PART II. Turbotax 2011 Allowable Rental Expenses 1. Turbotax 2011 Enter rents received 1. Turbotax 2011   2a. Turbotax 2011 Enter the rental portion of deductible home mortgage interest and qualified mortgage insurance premiums (see instructions) 2a. Turbotax 2011       b. Turbotax 2011 Enter the rental portion of real estate taxes b. Turbotax 2011       c. Turbotax 2011 Enter the rental portion of deductible casualty and theft losses (see instructions) c. Turbotax 2011       d. Turbotax 2011 Enter direct rental expenses (see instructions) d. Turbotax 2011       e. Turbotax 2011 Fully deductible rental expenses. Turbotax 2011 Add lines 2a–2d. Turbotax 2011 Enter here and  on the appropriate lines on Schedule E (see instructions) 2e. Turbotax 2011   3. Turbotax 2011 Subtract line 2e from line 1. Turbotax 2011 If zero or less, enter -0- 3. Turbotax 2011   4a. Turbotax 2011 Enter the rental portion of expenses directly related to operating or maintaining  the dwelling unit (such as repairs, insurance, and utilities) 4a. Turbotax 2011       b. Turbotax 2011 Enter the rental portion of excess mortgage interest and qualified mortgage insurance premiums (see instructions) b. Turbotax 2011       c. Turbotax 2011 Carryover of operating expenses from 2012 worksheet c. Turbotax 2011       d. Turbotax 2011 Add lines 4a–4c d. Turbotax 2011       e. Turbotax 2011 Allowable expenses. Turbotax 2011 Enter the smaller of line 3 or line 4d (see instructions) 4e. Turbotax 2011   5. Turbotax 2011 Subtract line 4e from line 3. Turbotax 2011 If zero or less, enter -0- 5. Turbotax 2011   6a. Turbotax 2011 Enter the rental portion of excess casualty and theft losses (see instructions) 6a. Turbotax 2011       b. Turbotax 2011 Enter the rental portion of depreciation of the dwelling unit b. Turbotax 2011       c. Turbotax 2011 Carryover of excess casualty losses and depreciation from 2012 worksheet c. Turbotax 2011       d. Turbotax 2011 Add lines 6a–6c d. Turbotax 2011       e. Turbotax 2011 Allowable excess casualty and theft losses and depreciation. Turbotax 2011 Enter the smaller of  line 5 or line 6d (see instructions) 6e. Turbotax 2011   PART III. Turbotax 2011 Carryover of Unallowed Expenses to Next Year 7a. Turbotax 2011 Operating expenses to be carried over to next year. Turbotax 2011 Subtract line 4e from line 4d 7a. Turbotax 2011   b. Turbotax 2011 Excess casualty and theft losses and depreciation to be carried over to next year. Turbotax 2011  Subtract line 6e from line 6d b. Turbotax 2011   Worksheet 5-1 Instructions. Turbotax 2011 Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Caution. Turbotax 2011 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. Turbotax 2011 Line 2a. Turbotax 2011 Figure the mortgage interest on the dwelling unit that you could deduct on Schedule A as if you had not rented the unit. Turbotax 2011 Do not include interest on a loan that did not benefit the dwelling unit. Turbotax 2011 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. Turbotax 2011 Include interest on a loan used to buy, build, or improve the dwelling unit, or to refinance such a loan. Turbotax 2011 Include the rental portion of this interest in the total you enter on line 2a of the worksheet. Turbotax 2011   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. Turbotax 2011 See the Schedule A instructions. Turbotax 2011 However, figure your adjusted gross income (Form 1040, line 38) without your rental income and expenses from the dwelling unit. Turbotax 2011 See Line 4b to deduct the part of the qualified mortgage insurance premiums not allowed because of the adjusted gross income limit. Turbotax 2011 Include the rental portion of the amount from Schedule A, line 13, in the total you enter on line 2a of the worksheet. Turbotax 2011   Note. Turbotax 2011 Do not file this Schedule A or use it to figure the amount to deduct on line 13 of that schedule. Turbotax 2011 Instead, figure the personal portion on a separate Schedule A. Turbotax 2011 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. Turbotax 2011           Line 2c. Turbotax 2011 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. Turbotax 2011 To do this, complete Section A of Form 4684, Casualties and Thefts, treating the losses as personal losses. Turbotax 2011 If any of the loss is due to a federally declared disaster, see the Instructions for Form 4684. Turbotax 2011 On Form 4684, line 17, enter 10% of your adjusted gross income figured without your rental income and expenses from the dwelling unit. Turbotax 2011 Enter the rental portion of the result from Form 4684, line 18, on line 2c of this worksheet. Turbotax 2011   Note. Turbotax 2011 Do not file this Form 4684 or use it to figure your personal losses on Schedule A. Turbotax 2011 Instead, figure the personal portion on a separate Form 4684. Turbotax 2011           Line 2d. Turbotax 2011 Enter the total of your rental expenses that are directly related only to the rental activity. Turbotax 2011 These include interest on loans used for rental activities other than to buy, build, or improve the dwelling unit. Turbotax 2011 Also include rental agency fees, advertising, office supplies, and depreciation on office equipment used in your rental activity. Turbotax 2011           Line 2e. Turbotax 2011 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. Turbotax 2011 Enter the amounts on lines 2a, 2b, 2c, and 2d on the appropriate lines of Schedule E. Turbotax 2011           Line 4b. Turbotax 2011 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. Turbotax 2011 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. Turbotax 2011 Do not include interest on a loan that did not benefit the dwelling unit  (as explained in the line 2a instructions). Turbotax 2011           Line 4e. Turbotax 2011 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. Turbotax 2011 *           Line 6a. Turbotax 2011 To find the rental portion of excess casualty and theft losses, use the Form 4684 you prepared for line 2c of this worksheet. Turbotax 2011   A. Turbotax 2011 Enter the amount from Form 4684, line 10       B. Turbotax 2011 Enter the rental portion of line A       C. Turbotax 2011 Enter the amount from line 2c of this worksheet       D. Turbotax 2011 Subtract line C from line B. Turbotax 2011 Enter the result here and on line 6a of this worksheet               Line 6e. Turbotax 2011 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. Turbotax 2011 * *Allocating the limited deduction. Turbotax 2011 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. Turbotax 2011 Enter the amount you allocate to each expense on the appropriate line of Schedule E, Part I. Turbotax 2011 Prev  Up  Next   Home   More Online Publications