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Can You E File An Amended Return

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Can You E File An Amended Return

Can you e file an amended return 9. Can you e file an amended return   Rental Income and Expenses Table of Contents Introduction Useful Items - You may want to see: Rental Income Rental ExpensesVacant while listed for sale. Can you e file an amended return Repairs and Improvements Other Expenses Property Changed to Rental Use Renting Part of Property Not Rented for Profit Personal Use of Dwelling Unit (Including Vacation Home)Example. Can you e file an amended return Dividing Expenses Dwelling Unit Used as a Home Reporting Income and Deductions DepreciationChanging your accounting method to deduct unclaimed depreciation. Can you e file an amended return Limits on Rental LossesAt-Risk Rules Passive Activity Limits How To Report Rental Income and ExpensesSchedule E (Form 1040) Introduction This chapter discusses rental income and expenses. Can you e file an amended return It also covers the following topics. Can you e file an amended return Personal use of dwelling unit (including vacation home). Can you e file an amended return Depreciation. Can you e file an amended return Limits on rental losses. Can you e file an amended return How to report your rental income and expenses. Can you e file an amended return If you sell or otherwise dispose of your rental property, see Publication 544, Sales and Other Dispositions of Assets. Can you e file an amended return If you have a loss from damage to, or theft of, rental property, see Publication 547, Casualties, Disasters, and Thefts. Can you e file an amended return If you rent a condominium or a cooperative apartment, some special rules apply to you even though you receive the same tax treatment as other owners of rental property. Can you e file an amended return See Publication 527, Residential Rental Property, for more information. Can you e file an amended return Useful Items - You may want to see: Publication 527 Residential Rental Property 534 Depreciating Property Placed in Service Before 1987 535 Business Expenses 925 Passive Activity and At-Risk Rules 946 How To Depreciate Property Form (and Instructions) 4562 Depreciation and Amortization 6251 Alternative Minimum Tax—Individuals 8582 Passive Activity Loss Limitations Schedule E (Form 1040) Supplemental Income and Loss Rental Income In most cases, you must include in your gross income all amounts you receive as rent. Can you e file an amended return Rental income is any payment you receive for the use or occupation of property. Can you e file an amended return In addition to amounts you receive as normal rent payments, there are other amounts that may be rental income. Can you e file an amended return When to report. Can you e file an amended return   If you are a cash-basis taxpayer, you report rental income on your return for the year you actually or constructively receive it. Can you e file an amended return You are a cash-basis taxpayer if you report income in the year you receive it, regardless of when it was earned. Can you e file an amended return You constructively receive income when it is made available to you, for example, by being credited to your bank account. Can you e file an amended return   For more information about when you constructively receive income, see Accounting Methods in chapter 1. Can you e file an amended return Advance rent. Can you e file an amended return   Advance rent is any amount you receive before the period that it covers. Can you e file an amended return 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. Can you e file an amended return Example. Can you e file an amended return You sign a 10-year lease to rent your property. Can you e file an amended return In the first year, you receive $5,000 for the first year's rent and $5,000 as rent for the last year of the lease. Can you e file an amended return You must include $10,000 in your income in the first year. Can you e file an amended return Canceling a lease. Can you e file an amended return   If your tenant pays you to cancel a lease, the amount you receive is rent. Can you e file an amended return Include the payment in your income in the year you receive it regardless of your method of accounting. Can you e file an amended return Expenses paid by tenant. Can you e file an amended return   If your tenant pays any of your expenses, the payments are rental income. Can you e file an amended return Because you must include this amount in income, you can deduct the expenses if they are deductible rental expenses. Can you e file an amended return See Rental Expenses , later, for more information. Can you e file an amended return Property or services. Can you e file an amended return   If you receive property or services, instead of money, as rent, include the fair market value of the property or services in your rental income. Can you e file an amended return   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. Can you e file an amended return Security deposits. Can you e file an amended return   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. Can you e file an amended return 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. Can you e file an amended return   If an amount called a security deposit is to be used as a final payment of rent, it is advance rent. Can you e file an amended return Include it in your income when you receive it. Can you e file an amended return Part interest. Can you e file an amended return   If you own a part interest in rental property, you must report your part of the rental income from the property. Can you e file an amended return Rental of property also used as your home. Can you e file an amended return   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. Can you e file an amended return However, you can deduct on Schedule A (Form 1040) the interest, taxes, and casualty and theft losses that are allowed for nonrental property. Can you e file an amended return See Personal Use of Dwelling Unit (Including Vacation Home) , later. Can you e file an amended return Rental Expenses This part discusses expenses of renting property that you ordinarily can deduct from your rental income. Can you e file an amended return It includes information on the expenses you can deduct if you rent part of your property, or if you change your property to rental use. Can you e file an amended return Depreciation , which you can also deduct from your rental income, is discussed later. Can you e file an amended return Personal use of rental property. Can you e file an amended return   If you sometimes use your rental property for personal purposes, you must divide your expenses between rental and personal use. Can you e file an amended return Also, your rental expense deductions may be limited. Can you e file an amended return See Personal Use of Dwelling Unit (Including Vacation Home) , later. Can you e file an amended return Part interest. Can you e file an amended return   If you own a part interest in rental property, you can deduct expenses that you paid according to your percentage of ownership. Can you e file an amended return When to deduct. Can you e file an amended return   If you are a cash-basis taxpayer, you generally deduct your rental expenses in the year you pay them. Can you e file an amended return Depreciation. Can you e file an amended return   You can begin to depreciate rental property when it is ready and available for rent. Can you e file an amended return See Placed-in-Service under When Does Depreciation Begin and End in chapter 2 of Publication 527. Can you e file an amended return Pre-rental expenses. Can you e file an amended return   You can deduct your ordinary and necessary expenses for managing, conserving, or maintaining rental property from the time you make it available for rent. Can you e file an amended return Uncollected rent. Can you e file an amended return   If you are a cash-basis taxpayer, do not deduct uncollected rent. Can you e file an amended return Because you have not included it in your income, it is not deductible. Can you e file an amended return Vacant rental property. Can you e file an amended return   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. Can you e file an amended return However, you cannot deduct any loss of rental income for the period the property is vacant. Can you e file an amended return Vacant while listed for sale. Can you e file an amended return   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. Can you e file an amended return If the property is not held out and available for rent while listed for sale, the expenses are not deductible rental expenses. Can you e file an amended return 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. Can you e file an amended return Improvements. Can you e file an amended return   You must capitalize any expense you pay to improve your rental property. Can you e file an amended return 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. Can you e file an amended return Betterments. Can you e file an amended return   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. Can you e file an amended return Restoration. Can you e file an amended return   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. Can you e file an amended return Adaptation. Can you e file an amended return   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. Can you e file an amended return Separate the costs of repairs and improvements, and keep accurate records. Can you e file an amended return You will need to know the cost of improvements when you sell or depreciate your property. Can you e file an amended return The expenses you capitalize for improving your property can generally be depreciated as if the improvement were separate property. Can you e file an amended return Other Expenses Other expenses you can deduct from your rental income include advertising, cleaning and maintenance, utilities, fire and liability insurance, taxes, interest, commissions for the collection of rent, ordinary and necessary travel and transportation, and other expenses, discussed next. Can you e file an amended return Insurance premiums paid in advance. Can you e file an amended return   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. Can you e file an amended return You cannot deduct the total premium in the year you pay it. Can you e file an amended return Legal and other professional fees. Can you e file an amended return   You can deduct, as a rental expense, legal and other professional expenses, such as tax return preparation fees you paid to prepare Schedule E (Form 1040), Part I. Can you e file an amended return For example, on your 2013 Schedule E, you can deduct fees paid in 2013 to prepare your 2012 Schedule E, Part I. Can you e file an amended return 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. Can you e file an amended return Local benefit taxes. Can you e file an amended return   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. Can you e file an amended return These charges are nondepreciable capital expenditures, and must be added to the basis of your property. Can you e file an amended return However, you can deduct local benefit taxes that are for maintaining, repairing, or paying interest charges for the benefits. Can you e file an amended return Local transportation expenses. Can you e file an amended return    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. Can you e file an amended return 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. Can you e file an amended return See Publication 587, Business Use of Your Home, for information on determining if your home office qualifies as a principal place of business. Can you e file an amended return   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. Can you e file an amended return For 2013, the standard mileage rate for business use is 56. Can you e file an amended return 5 cents per mile. Can you e file an amended return For more information, see chapter 26. Can you e file an amended return    To deduct car expenses under either method, you must keep records that follow the rules in chapter 26. Can you e file an amended return In addition, you must complete Form 4562, Part V, and attach it to your tax return. Can you e file an amended return Rental of equipment. Can you e file an amended return   You can deduct the rent you pay for equipment that you use for rental purposes. Can you e file an amended return However, in some cases, lease contracts are actually purchase contracts. Can you e file an amended return If so, you cannot deduct these payments. Can you e file an amended return You can recover the cost of purchased equipment through depreciation. Can you e file an amended return Rental of property. Can you e file an amended return   You can deduct the rent you pay for property that you use for rental purposes. Can you e file an amended return 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. Can you e file an amended return Travel expenses. Can you e file an amended return   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. Can you e file an amended return You must properly allocate your expenses between rental and nonrental activities. Can you e file an amended return You cannot deduct the cost of traveling away from home if the primary purpose of the trip was to improve your property. Can you e file an amended return You recover the cost of improvements by taking depreciation. Can you e file an amended return For information on travel expenses, see chapter 26. Can you e file an amended return    To deduct travel expenses, you must keep records that follow the rules in chapter 26. Can you e file an amended return   See Rental Expenses in Publication 527 for more information. Can you e file an amended return Property Changed to Rental Use If you change your home or other property (or a part of it) to rental use at any time other than the beginning of your tax year, you must divide yearly expenses, such as taxes and insurance, between rental use and personal use. Can you e file an amended return You can deduct as rental expenses only the part of the expense that is for the part of the year the property was used or held for rental purposes. Can you e file an amended return You cannot deduct depreciation or insurance for the part of the year the property was held for personal use. Can you e file an amended return However, you can include the home mortgage interest, qualified mortgage insurance premiums, and real estate tax expenses for the part of the year the property was held for personal use as an itemized deduction on Schedule A (Form 1040). Can you e file an amended return Example. Can you e file an amended return Your tax year is the calendar year. Can you e file an amended return You moved from your home in May and started renting it out on June 1. Can you e file an amended return You can deduct as rental expenses seven-twelfths of your yearly expenses, such as taxes and insurance. Can you e file an amended return Starting with June, you can deduct as rental expenses the amounts you pay for items generally billed monthly, such as utilities. Can you e file an amended return Renting Part of Property If you rent part of your property, you must divide certain expenses between the part of the property used for rental purposes and the part of the property used for personal purposes, as though you actually had two separate pieces of property. Can you e file an amended return You can deduct the expenses related to the part of the property used for rental purposes, such as home mortgage interest, qualified mortgage insurance premiums, and real estate taxes, as rental expenses on Schedule E (Form 1040). Can you e file an amended return You can also deduct as rental expenses a portion of other expenses that normally are nondeductible personal expenses, such as expenses for electricity or painting the outside of your house. Can you e file an amended return There is no change in the types of expenses deductible for the personal-use part of your property. Can you e file an amended return Generally, these expenses may be deducted only if you itemize your deductions on Schedule A (Form 1040). Can you e file an amended return You cannot deduct any part of the cost of the first phone line even if your tenants have unlimited use of it. Can you e file an amended return You do not have to divide the expenses that belong only to the rental part of your property. Can you e file an amended return For example, if you paint a room that you rent, or if you pay premiums for liability insurance in connection with renting a room in your home, your entire cost is a rental expense. Can you e file an amended return If you install a second phone line strictly for your tenants' use, all of the cost of the second line is deductible as a rental expense. Can you e file an amended return You can deduct depreciation, discussed later, on the part of the house used for rental purposes as well as on the furniture and equipment you use for rental purposes. Can you e file an amended return How to divide expenses. Can you e file an amended return   If an expense is for both rental use and personal use, such as mortgage interest or heat for the entire house, you must divide the expense between the rental use and the personal use. Can you e file an amended return You can use any reasonable method for dividing the expense. Can you e file an amended return It may be reasonable to divide the cost of some items (for example, water) based on the number of people using them. Can you e file an amended return The two most common methods for dividing an expense are based on (1) the number of rooms in your home, and (2) the square footage of your home. Can you e file an amended return Not Rented for Profit If you do not rent your property to make a profit, you can deduct your rental expenses only up to the amount of your rental income. Can you e file an amended return You cannot deduct a loss or carry forward to the next year any rental expenses that are more than your rental income for the year. Can you e file an amended return For more information about the rules for an activity not engaged in for profit, see Not-for-Profit Activities in chapter 1 of Publication 535. Can you e file an amended return Where to report. Can you e file an amended return   Report your not-for-profit rental income on Form 1040, line 21. Can you e file an amended return For example, you can include your mortgage interest and any qualified mortgage insurance premiums (if you use the property as your main home or second home), real estate taxes, and casualty losses on the appropriate lines of Schedule A (Form 1040) if you itemize your deductions. Can you e file an amended return   If you itemize your deductions, claim your other rental expenses, subject to the rules explained in chapter 1 of Publication 535, as miscellaneous itemized deductions on Form 1040, Schedule A, line 23. Can you e file an amended return You can deduct these expenses only if they, together with certain other miscellaneous itemized deductions, total more than 2% of your adjusted gross income. Can you e file an amended return Personal Use of Dwelling Unit (Including Vacation Home) 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. Can you e file an amended return 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. Can you e file an amended return Only your rental expenses may be deducted on Schedule E (Form 1040). Can you e file an amended return Some of your personal expenses may be deductible if you itemize your deductions on Schedule A (Form 1040). Can you e file an amended return You must also determine if the dwelling unit is considered a home. Can you e file an amended return The amount of rental expenses that you can deduct may be limited if the dwelling unit is considered a home. Can you e file an amended return Whether a dwelling unit is considered a home depends on how many days during the year are considered to be days of personal use. Can you e file an amended return 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. Can you e file an amended return Dwelling unit. Can you e file an amended return   A dwelling unit includes a house, apartment, condominium, mobile home, boat, vacation home, or similar property. Can you e file an amended return It also includes all structures or other property belonging to the dwelling unit. Can you e file an amended return A dwelling unit has basic living accommodations, such as sleeping space, a toilet, and cooking facilities. Can you e file an amended return   A dwelling unit does not include property used solely as a hotel, motel, inn, or similar establishment. Can you e file an amended return 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. Can you e file an amended return Example. Can you e file an amended return   You rent a room in your home that is always available for short-term occupancy by paying customers. Can you e file an amended return You do not use the room yourself, and you allow only paying customers to use the room. Can you e file an amended return The room is used solely as a hotel, motel, inn, or similar establishment and is not a dwelling unit. Can you e file an amended return 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. Can you e file an amended return When dividing your expenses, follow these rules. Can you e file an amended return 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. Can you e file an amended return This rule does not apply when determining whether you used the unit as a home. Can you e file an amended return Any day that the unit is available for rent but not actually rented is not a day of rental use. Can you e file an amended return Example. Can you e file an amended return Your beach cottage was available for rent from June 1 through August 31 (92 days). Can you e file an amended return During that time, 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. Can you e file an amended return 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. Can you e file an amended return Your family also used the cottage during the last 2 weeks of May (14 days). Can you e file an amended return The cottage was not used at all before May 17 or after August 31. Can you e file an amended return You figure the part of the cottage expenses to treat as rental expenses as follows. Can you e file an amended return The cottage was used for rental a total of 85 days (92 − 7). Can you e file an amended return The days it was available for rent but not rented (7 days) are not days of rental use. Can you e file an amended return The July weekend (2 days) you used it is rental use because you received a fair rental price for the weekend. Can you e file an amended return You used the cottage for personal purposes for 14 days (the last 2 weeks in May). Can you e file an amended return The total use of the cottage was 99 days (14 days personal use + 85 days rental use). Can you e file an amended return Your rental expenses are 85/99 (86%) of the cottage expenses. Can you e file an amended return Note. Can you e file an amended return 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. Can you e file an amended return Therefore, you had 16 days of personal use and 83 days of rental use for this purpose. Can you e file an amended return 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. Can you e file an amended return If you have a net loss, you may not be able to deduct all of the rental expenses. Can you e file an amended return See Dwelling Unit Used as a Home, next. Can you e file an amended return 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. Can you e file an amended return 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. Can you e file an amended return See What is a day of personal use , later. Can you e file an amended return Fair rental price. Can you e file an amended return   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. Can you e file an amended return 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. Can you e file an amended return   If a dwelling unit is used for personal purposes on a day it is rented at a fair rental price, do not count that day as a day of rental use in applying (2) above. Can you e file an amended return Instead, count it as a day of personal use in applying both (1) and (2) above. Can you e file an amended return 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. Can you e file an amended return You or any other person who has an interest in the unit, unless you rent it to another owner as his or her main home under a shared equity financing agreement (defined later). Can you e file an amended return However, see Days used as a main home before or after renting , later. Can you e file an amended return A member of your family or a member of the family of any other person who owns an interest in the unit, unless the family member uses the dwelling unit as his or her main home and pays a fair rental price. Can you e file an amended return Family includes only your spouse, brothers and sisters, half-brothers and half-sisters, ancestors (parents, grandparents, etc. Can you e file an amended return ), and lineal descendants (children, grandchildren, etc. Can you e file an amended return ). Can you e file an amended return Anyone under an arrangement that lets you use some other dwelling unit. Can you e file an amended return Anyone at less than a fair rental price. Can you e file an amended return Main home. Can you e file an amended return   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. Can you e file an amended return Shared equity financing agreement. Can you e file an amended return   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. Can you e file an amended return Donation of use of property. Can you e file an amended return   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. Can you e file an amended return Examples. Can you e file an amended return   The following examples show how to determine days of personal use. Can you e file an amended return Example 1. Can you e file an amended return You and your neighbor are co-owners of a condominium at the beach. Can you e file an amended return Last year, you rented the unit to vacationers whenever possible. Can you e file an amended return The unit was not used as a main home by anyone. Can you e file an amended return Your neighbor used the unit for 2 weeks last year; you did not use it at all. Can you e file an amended return 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. Can you e file an amended return Example 2. Can you e file an amended return You and your neighbors are co-owners of a house under a shared equity financing agreement. Can you e file an amended return Your neighbors live in the house and pay you a fair rental price. Can you e file an amended return 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. Can you e file an amended return This is because your neighbors rent the house as their main home under a shared equity financing agreement. Can you e file an amended return Example 3. Can you e file an amended return You own a rental property that you rent to your son. Can you e file an amended return Your son does not own any interest in this property. Can you e file an amended return He uses it as his main home and pays you a fair rental price. Can you e file an amended return 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. Can you e file an amended return Example 4. Can you e file an amended return You rent your beach house to Joshua. Can you e file an amended return Joshua rents his cabin in the mountains to you. Can you e file an amended return You each pay a fair rental price. Can you e file an amended return You are using your house for personal purposes on the days that Joshua uses it because your house is used by Joshua under an arrangement that allows you to use his house. Can you e file an amended return Days used for repairs and maintenance. Can you e file an amended return   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. Can you e file an amended return 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. Can you e file an amended return Days used as a main home before or after renting. Can you e file an amended return   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. Can you e file an amended return Do not count them as days of personal use if: You rented or tried to rent the property for 12 or more consecutive months. Can you e file an amended return 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. Can you e file an amended return However, this special rule does not apply when dividing expenses between rental and personal use. Can you e file an amended return Examples. Can you e file an amended return   The following examples show how to determine whether you used your rental property as a home. Can you e file an amended return Example 1. Can you e file an amended return You converted the basement of your home into an apartment with a bedroom, a bathroom, and a small kitchen. Can you e file an amended return You rented the basement apartment at a fair rental price to college students during the regular school year. Can you e file an amended return You rented to them on a 9-month lease (273 days). Can you e file an amended return You figured 10% of the total days rented to others at a fair rental price is 27 days. Can you e file an amended return During June (30 days), your brothers stayed with you and lived in the basement apartment rent free. Can you e file an amended return Your basement apartment was used as a home because you used it for personal purposes for 30 days. Can you e file an amended return Rent-free use by your brothers is considered personal use. Can you e file an amended return Your personal use (30 days) is more than the greater of 14 days or 10% of the total days it was rented (27 days). Can you e file an amended return Example 2. Can you e file an amended return 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). Can you e file an amended return Your sister-in-law stayed in the room, rent free, for the last 3 weeks (21 days) in July. Can you e file an amended return You figured 10% of the total days rented to others at a fair rental price is 3 days. Can you e file an amended return The room was used as a home because you used it for personal purposes for 21 days. Can you e file an amended return That is more than the greater of 14 days or 10% of the 27 days it was rented (3 days). Can you e file an amended return Example 3. Can you e file an amended return You own a condominium apartment in a resort area. Can you e file an amended return You rented it at a fair rental price for a total of 170 days during the year. Can you e file an amended return For 12 of those 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. Can you e file an amended return Your family actually used the apartment for 10 of those days. Can you e file an amended return Therefore, the apartment is treated as having been rented for 160 (170 − 10) days. Can you e file an amended return You figured 10% of the total days rented to others at a fair rental price is 16 days. Can you e file an amended return Your family also used the apartment for 7 other days during the year. Can you e file an amended return You used the apartment as a home because you used it for personal purposes for 17 days. Can you e file an amended return That is more than the greater of 14 days or 10% of the 160 days it was rented (16 days). Can you e file an amended return Minimal rental use. Can you e file an amended return   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. Can you e file an amended return See Used as a home but rented less than 15 days , later, for more information. Can you e file an amended return Limit on deductions. Can you e file an amended return   Renting a dwelling unit that is considered a home is not a passive activity. Can you e file an amended return 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. Can you e file an amended return 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. Can you e file an amended return Any expenses carried forward to the next year will be subject to any limits that apply for that year. Can you e file an amended return 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. Can you e file an amended return   To figure your deductible rental expenses for this year and any carryover to next year, use Worksheet 9-1. Can you e file an amended return Reporting Income and Deductions Property not used for personal purposes. Can you e file an amended return   If you do not use a dwelling unit for personal purposes, see How To Report Rental Income and Expenses , later, for how to report your rental income and expenses. Can you e file an amended return Property used for personal purposes. Can you e file an amended return   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. Can you e file an amended return Not used as a home. Can you e file an amended return   If you use a dwelling unit for personal purposes, but not as a home, report all the rental income in your income. Can you e file an amended return 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 Dividing Expenses . Can you e file an amended return The expenses for personal use are not deductible as rental expenses. Can you e file an amended return   Your deductible rental expenses can be more than your gross rental income; however, see Limits on Rental Losses , later. Can you e file an amended return Used as a home but rented less than 15 days. Can you e file an amended return   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). Can you e file an amended return You are not required to report the rental income and rental expenses from this activity. Can you e file an amended return The expenses, including qualified mortgage interest, property taxes, and any qualified casualty loss will be reported as normally allowed on Schedule A (Form 1040). Can you e file an amended return See the Instructions for Schedule A (Form 1040) for more information on deducting these expenses. Can you e file an amended return Used as a home and rented 15 days or more. Can you e file an amended return   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. Can you e file an amended return 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 Dividing Expenses . Can you e file an amended return The expenses for personal use are not deductible as rental expenses. Can you e file an amended return   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. Can you e file an amended return You do not need to use Worksheet 9-1. Can you e file an amended return   However, if you had a net loss from renting the dwelling unit for the year, your deduction for certain rental expenses is limited. Can you e file an amended return To figure your deductible rental expenses and any carryover to next year, use Worksheet 9-1. Can you e file an amended return Depreciation You recover the cost of income-producing property through yearly tax deductions. Can you e file an amended return You do this by depreciating the property; that is, by deducting some of the cost each year on your tax return. Can you e file an amended return Three factors determine how much depreciation you can deduct each year: (1) your basis in the property, (2) the recovery period for the property, and (3) the depreciation method used. Can you e file an amended return You cannot simply deduct your mortgage or principal payments, or the cost of furniture, fixtures, and equipment, as an expense. Can you e file an amended return You can deduct depreciation only on the part of your property used for rental purposes. Can you e file an amended return Depreciation reduces your basis for figuring gain or loss on a later sale or exchange. Can you e file an amended return You may have to use Form 4562 to figure and report your depreciation. Can you e file an amended return See How To Report Rental Income and Expenses , later. Can you e file an amended return Alternative minimum tax (AMT). Can you e file an amended return    If you use accelerated depreciation, you may be subject to the AMT. Can you e file an amended return Accelerated depreciation allows you to deduct more depreciation earlier in the recovery period than you could deduct using a straight line method (same deduction each year). Can you e file an amended return Claiming the correct amount of depreciation. Can you e file an amended return   You should claim the correct amount of depreciation each tax year. Can you e file an amended return If you did not claim all the depreciation you were entitled to deduct, you must still reduce your basis in the property by the full amount of depreciation that you could have deducted. Can you e file an amended return   If you deducted an incorrect amount of depreciation for property in any year, you may be able to make a correction by filing Form 1040X, Amended U. Can you e file an amended return S Individual Income Tax Return. Can you e file an amended return If you are not allowed to make the correction on an amended return, you can change your accounting method to claim the correct amount of depreciation. Can you e file an amended return See Claiming the correct amount of depreciation in chapter 2 of Publication 527 for more information. Can you e file an amended return Changing your accounting method to deduct unclaimed depreciation. Can you e file an amended return   To change your accounting method, you generally must file Form 3115, Application for Change in Accounting Method, to get the consent of the IRS. Can you e file an amended return In some instances, that consent is automatic. Can you e file an amended return For more information, see chapter 1 of Publication 946. Can you e file an amended return Land. Can you e file an amended return   You cannot depreciate the cost of land because land generally does not wear out, become obsolete, or get used up. Can you e file an amended return The costs of clearing, grading, planting, and landscaping are usually all part of the cost of land and cannot be depreciated. Can you e file an amended return More information. Can you e file an amended return   See Publication 527 for more information about depreciating rental property and see Publication 946 for more information about depreciation. Can you e file an amended return Limits on Rental Losses If you have a loss from your rental real estate activity, two sets of rules may limit the amount of loss you can deduct. Can you e file an amended return You must consider these rules in the order shown below. Can you e file an amended return At-risk rules. Can you e file an amended return These rules are applied first if there is investment in your rental real estate activity for which you are not at risk. Can you e file an amended return This applies only if the real property was placed in service after 1986. Can you e file an amended return Passive activity limits. Can you e file an amended return Generally, rental real estate activities are considered passive activities and losses are not deductible unless you have income from other passive activities to offset them. Can you e file an amended return However, there are exceptions. Can you e file an amended return At-Risk Rules You may be subject to the at-risk rules if you have: A loss from an activity carried on as a trade or business or for the production of income, and Amounts invested in the activity for which you are not fully at risk. Can you e file an amended return Losses from holding real property (other than mineral property) placed in service before 1987 are not subject to the at-risk rules. Can you e file an amended return In most cases, any loss from an activity subject to the at-risk rules is allowed only to the extent of the total amount you have at risk in the activity at the end of the tax year. Can you e file an amended return You are considered at risk in an activity to the extent of cash and the adjusted basis of other property you contributed to the activity and certain amounts borrowed for use in the activity. Can you e file an amended return See Publication 925 for more information. Can you e file an amended return Passive Activity Limits In most cases, all rental real estate activities (except those of certain real estate professionals, discussed later) are passive activities. Can you e file an amended return For this purpose, a rental activity is an activity from which you receive income mainly for the use of tangible property, rather than for services. Can you e file an amended return Limits on passive activity deductions and credits. Can you e file an amended return    Deductions or losses from passive activities are limited. Can you e file an amended return You generally cannot offset income, other than passive income, with losses from passive activities. Can you e file an amended return Nor can you offset taxes on income, other than passive income, with credits resulting from passive activities. Can you e file an amended return Any excess loss or credit is carried forward to the next tax year. Can you e file an amended return   For a detailed discussion of these rules, see Publication 925. Can you e file an amended return    You may have to complete Form 8582 to figure the amount of any passive activity loss for the current tax year for all activities and the amount of the passive activity loss allowed on your tax return. Can you e file an amended return Real estate professionals. Can you e file an amended return   Rental activities in which you materially participated during the year are not passive activities if, for that year, you were a real estate professional. Can you e file an amended return For a detailed discussion of the requirements, see Publication 527. Can you e file an amended return For a detailed discussion of material participation, see Publication 925. Can you e file an amended return Exception for Personal Use of Dwelling Unit If you used the rental property as a home during the year, any income, deductions, gain, or loss allocable to such use shall not be taken into account for purposes of the passive activity loss limitation. Can you e file an amended return Instead, follow the rules explained in Personal Use of Dwelling Unit (Including Vacation Home), earlier. Can you e file an amended return Exception for Rental Real Estate Activities With Active Participation If you or your spouse actively participated in a passive rental real estate activity, you may be able to deduct up to $25,000 of loss from the activity from your nonpassive income. Can you e file an amended return This special allowance is an exception to the general rule disallowing losses in excess of income from passive activities. Can you e file an amended return Similarly, you may be able to offset credits from the activity against the tax on up to $25,000 of nonpassive income after taking into account any losses allowed under this exception. Can you e file an amended return Active participation. Can you e file an amended return   You actively participated in a rental real estate activity if you (and your spouse) owned at least 10% of the rental property and you made management decisions or arranged for others to provide services (such as repairs) in a significant and bona fide sense. Can you e file an amended return Management decisions that may count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and similar decisions. Can you e file an amended return Maximum special allowance. Can you e file an amended return   The maximum special allowance is: $25,000 for single individuals and married individuals filing a joint return for the tax year, $12,500 for married individuals who file separate returns for the tax year and lived apart from their spouses at all times during the tax year, and $25,000 for a qualifying estate reduced by the special allowance for which the surviving spouse qualified. Can you e file an amended return   If your modified adjusted gross income (MAGI) is $100,000 or less ($50,000 or less if married filing separately), you can deduct your loss up to the amount specified above. Can you e file an amended return If your MAGI is more than $100,000 (more than $50,000 if married filing separately), your special allowance is limited to 50% of the difference between $150,000 ($75,000 if married filing separately) and your MAGI. Can you e file an amended return   Generally, if your MAGI is $150,000 or more ($75,000 or more if you are married filing separately), there is no special allowance. Can you e file an amended return More information. Can you e file an amended return   See Publication 925 for more information on the passive loss limits, including information on the treatment of unused disallowed passive losses and credits and the treatment of gains and losses realized on the disposition of a passive activity. Can you e file an amended return How To Report Rental Income and Expenses The basic form for reporting residential rental income and expenses is Schedule E (Form 1040). Can you e file an amended return However, do not use that schedule to report a not-for-profit activity. Can you e file an amended return See Not Rented for Profit, earlier. Can you e file an amended return Providing substantial services. Can you e file an amended return   If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, report your rental income and expenses on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business (Sole Proprietorship). Can you e file an amended return Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc. Can you e file an amended return For information, see Publication 334, Tax Guide for Small Business. Can you e file an amended return You also may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. Can you e file an amended return   Use Form 1065, U. Can you e file an amended return S. Can you e file an amended return Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). Can you e file an amended return Qualified joint venture. Can you e file an amended return   If you and your spouse each materially participate as the only members of a jointly owned and operated real estate business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership. Can you e file an amended return This election, in most cases, will not increase the total tax owed on the joint return, but it does give each of you credit for social security earnings on which retirement benefits are based and for Medicare coverage if your rental income is subject to self-employment tax. Can you e file an amended return For more information, see Publication 527. Can you e file an amended return Form 1098, Mortgage Interest Statement. Can you e file an amended return    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. Can you e file an amended return 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. Can you e file an amended return Attach a statement to your return showing the name and address of the other person. Can you e file an amended return In the left margin of Schedule E, next to line 13, enter “See attached. Can you e file an amended return ” Schedule E (Form 1040) If you rent buildings, rooms, or apartments, and provide basic services such as heat and light, trash collection, etc. Can you e file an amended return , you normally report your rental income and expenses on Schedule E, Part I. Can you e file an amended return List your total income, expenses, and depreciation for each rental property. Can you e file an amended return Be sure to enter the number of fair rental and personal use days on line 2. Can you e file an amended return If you have more than three rental or royalty properties, complete and attach as many Schedules E as are needed to list the properties. Can you e file an amended return Complete lines 1 and 2 for each property. Can you e file an amended return However, fill in lines 23a through 26 on only one Schedule E. Can you e file an amended return On Schedule E, page 1, line 18, enter the depreciation you are claiming for each property. Can you e file an amended return To find out if you need to attach Form 4562, see Form 4562, in chapter 3 of Publication 527. Can you e file an amended return If you have a loss from your rental real estate activity, you also may need to complete one or both of the following forms. Can you e file an amended return Form 6198, At-Risk Limitations. Can you e file an amended return See At-Risk Rules , earlier. Can you e file an amended return Also see Publication 925. Can you e file an amended return Form 8582, Passive Activity Loss Limitations. Can you e file an amended return See Passive Activity Limits , earlier. Can you e file an amended return Page 2 of Schedule E is used to report income or loss from partnerships, S corporations, estates, trusts, and real estate mortgage investment conduits. Can you e file an amended return If you need to use page 2 of Schedule E, be sure to use page 2 of the same Schedule E you used to enter your rental activity on page 1. Can you e file an amended return Also, include the amount from line 26 (Part I) in the “Total income or (loss)” on line 41 (Part V). Can you e file an amended return Worksheet 9-1. Can you e file an amended return 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. Can you e file an amended return Did you use the dwelling unit as a home this year? (See Dwelling Unit Used as a Home . Can you e file an amended return ) 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. Can you e file an amended return Rental Use Percentage A. Can you e file an amended return Total days available for rent at fair rental price A. Can you e file an amended return       B. Can you e file an amended return Total days available for rent (line A) but not rented B. Can you e file an amended return       C. Can you e file an amended return Total days of rental use. Can you e file an amended return Subtract line B from line A C. Can you e file an amended return       D. Can you e file an amended return Total days of personal use (including days rented at less than fair rental price) D. Can you e file an amended return       E. Can you e file an amended return Total days of rental and personal use. Can you e file an amended return Add lines C and D E. Can you e file an amended return       F. Can you e file an amended return Percentage of expenses allowed for rental. Can you e file an amended return Divide line C by line E     F. Can you e file an amended return   PART II. Can you e file an amended return Allowable Rental Expenses 1. Can you e file an amended return Enter rents received 1. Can you e file an amended return   2a. Can you e file an amended return Enter the rental portion of deductible home mortgage interest and qualified mortgage insurance premiums (see instructions) 2a. Can you e file an amended return       b. Can you e file an amended return Enter the rental portion of real estate taxes b. Can you e file an amended return       c. Can you e file an amended return Enter the rental portion of deductible casualty and theft losses (see instructions) c. Can you e file an amended return       d. Can you e file an amended return Enter direct rental expenses (see instructions) d. Can you e file an amended return       e. Can you e file an amended return Fully deductible rental expenses. Can you e file an amended return Add lines 2a–2d. Can you e file an amended return Enter here and  on the appropriate lines on Schedule E (see instructions) 2e. Can you e file an amended return   3. Can you e file an amended return Subtract line 2e from line 1. Can you e file an amended return If zero or less, enter -0- 3. Can you e file an amended return   4a. Can you e file an amended return Enter the rental portion of expenses directly related to operating or maintaining  the dwelling unit (such as repairs, insurance, and utilities) 4a. Can you e file an amended return       b. Can you e file an amended return Enter the rental portion of excess mortgage interest and qualified mortgage insurance premiums (see instructions) b. Can you e file an amended return       c. Can you e file an amended return Carryover of operating expenses from 2012 worksheet c. Can you e file an amended return       d. Can you e file an amended return Add lines 4a–4c d. Can you e file an amended return       e. Can you e file an amended return Allowable expenses. Can you e file an amended return Enter the smaller of line 3 or line 4d (see instructions) 4e. Can you e file an amended return   5. Can you e file an amended return Subtract line 4e from line 3. Can you e file an amended return If zero or less, enter -0- 5. Can you e file an amended return   6a. Can you e file an amended return Enter the rental portion of excess casualty and theft losses (see instructions) 6a. Can you e file an amended return       b. Can you e file an amended return Enter the rental portion of depreciation of the dwelling unit b. Can you e file an amended return       c. Can you e file an amended return Carryover of excess casualty losses and depreciation from 2012 worksheet c. Can you e file an amended return       d. Can you e file an amended return Add lines 6a–6c d. Can you e file an amended return       e. Can you e file an amended return Allowable excess casualty and theft losses and depreciation. Can you e file an amended return Enter the smaller of  line 5 or line 6d (see instructions) 6e. Can you e file an amended return   PART III. Can you e file an amended return Carryover of Unallowed Expenses to Next Year 7a. Can you e file an amended return Operating expenses to be carried over to next year. Can you e file an amended return Subtract line 4e from line 4d 7a. Can you e file an amended return   b. Can you e file an amended return Excess casualty and theft losses and depreciation to be carried over to next year. Can you e file an amended return  Subtract line 6e from line 6d b. Can you e file an amended return   Worksheet 9-1 Instructions. Can you e file an amended return Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Caution. Can you e file an amended return 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. Can you e file an amended return Line 2a. Can you e file an amended return Figure the mortgage interest on the dwelling unit that you could deduct on Schedule A as if you had not rented the unit. Can you e file an amended return Do not include interest on a loan that did not benefit the dwelling unit. Can you e file an amended return 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. Can you e file an amended return Include interest on a loan used to buy, build, or improve the dwelling unit, or to refinance such a loan. Can you e file an amended return Include the rental portion of this interest in the total you enter on line 2a of the worksheet. Can you e file an amended return   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. Can you e file an amended return See the Schedule A instructions. Can you e file an amended return However, figure your adjusted gross income (Form 1040, line 38) without your rental income and expenses from the dwelling unit. Can you e file an amended return See Line 4b to deduct the part of the qualified mortgage insurance premiums not allowed because of the adjusted gross income limit. Can you e file an amended return Include the rental portion of the amount from Schedule A, line 13, in the total you enter on line 2a of the worksheet. Can you e file an amended return   Note. Can you e file an amended return Do not file this Schedule A or use it to figure the amount to deduct on line 13 of that schedule. Can you e file an amended return Instead, figure the personal portion on a separate Schedule A. Can you e file an amended return 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. Can you e file an amended return           Line 2c. Can you e file an amended return 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. Can you e file an amended return To do this, complete Section A of Form 4684, Casualties and Thefts, treating the losses as personal losses. Can you e file an amended return If any of the loss is due to a federally declared disaster, see the Instructions for Form 4684. Can you e file an amended return On Form 4684, line 17, enter 10% of your adjusted gross income figured without your rental income and expenses from the dwelling unit. Can you e file an amended return Enter the rental portion of the result from Form 4684, line 18, on line 2c of this worksheet. Can you e file an amended return   Note. Can you e file an amended return Do not file this Form 4684 or use it to figure your personal losses on Schedule A. Can you e file an amended return Instead, figure the personal portion on a separate Form 4684. Can you e file an amended return           Line 2d. Can you e file an amended return Enter the total of your rental expenses that are directly related only to the rental activity. Can you e file an amended return These include interest on loans used for rental activities other than to buy, build, or improve the dwelling unit. Can you e file an amended return Also include rental agency fees, advertising, office supplies, and depreciation on office equipment used in your rental activity. Can you e file an amended return           Line 2e. Can you e file an amended return 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. Can you e file an amended return Enter the amounts on lines 2a, 2b, 2c, and 2d on the appropriate lines of Schedule E. Can you e file an amended return           Line 4b. Can you e file an amended return On line 2a, you entered the rental portion of the mortgage interest and qualified mortgage insurance premiums you could deduct on Schedule A if you had not rented the dwelling unit. Can you e file an amended return 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. Can you e file an amended return Do not include interest on a loan that did not benefit the dwelling unit (as explained in the line 2a instructions). Can you e file an amended return           Line 4e. Can you e file an amended return 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. Can you e file an amended return *           Line 6a. Can you e file an amended return To find the rental portion of excess casualty and theft losses, use the Form 4684 you prepared for line 2c of this worksheet. Can you e file an amended return   A. Can you e file an amended return Enter the amount from Form 4684, line 10       B. Can you e file an amended return Enter the rental portion of line A       C. Can you e file an amended return Enter the amount from line 2c of this worksheet       D. Can you e file an amended return Subtract line C from line B. Can you e file an amended return Enter the result here and on line 6a of this worksheet               Line 6e. Can you e file an amended return 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. Can you e file an amended return * *Allocating the limited deduction. Can you e file an amended return 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. Can you e file an amended return Enter the amount you allocate to each expense on the appropriate line of Schedule E, Part I. Can you e file an amended return Prev  Up  Next   Home   More Online Publications
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The Can You E File An Amended Return

Can you e file an amended return Tax Changes for Businesses Table of Contents 2001 ChangesNew 5-Year Carryback Rule for Net Operating Losses (NOLs) Electronic Form 1099 Tax Incentives for New York Liberty Zone Other 2001 Changes 2002 ChangesNonaccrual-Experience Method Issuance of Qualified Zone Academy Bonds Depletion Work Opportunity Credit Expanded in New York Liberty Zone Credit For Pension Plan Startup Costs Welfare-to-Work Credit Extended Work Opportunity Credit Extended Electric and Clean-Fuel Vehicles Renewable Electricity Production Credit Later ChangesSpecial Depreciation Allowance Extension of Placed in Service Date Special Liberty Zone Depreciation Allowance for New and Used Property Depreciation of Property Used on Indian Reservations Indian Employment Credit Extended 2001 Changes New 5-Year Carryback Rule for Net Operating Losses (NOLs) If you have an NOL from a tax year ending during 2001 or 2002, you must generally carry back the entire amount of the NOL to the 5 tax years before the NOL year (the carryback period). Can you e file an amended return However, you can still choose to use the previous carryback period. Can you e file an amended return You also can choose not to carry back an NOL and only carry it forward. Can you e file an amended return Individuals, estates, and trusts can file Form 1045, Application for Tentative Refund. Can you e file an amended return Corporations can file Form 1139, Corporation Application for Tentative Refund. Can you e file an amended return The instructions for these forms will be revised to reflect the new law. Can you e file an amended return Electronic Form 1099 For tax years ending after March 9, 2002, most Forms 1099 can be furnished electronically if the recipient consents, according to IRS regulations, to receive it that way. Can you e file an amended return Tax Incentives for New York Liberty Zone New tax benefits are provided for the parts of New York City damaged in the terrorist attacks on September 11, 2001. Can you e file an amended return These benefits apply to the newly created New York Liberty Zone, which is the area located on or south of Canal Street, East Broadway (east of its intersection with Canal Street), or Grand Street (east of its intersection with East Broadway), in the Borough of Manhattan. Can you e file an amended return Tax benefits for the New York Liberty Zone include the following. Can you e file an amended return A special depreciation allowance equal to 30% of the adjusted basis of qualified Liberty Zone property. Can you e file an amended return It is allowed for the year the property is placed in service. Can you e file an amended return No alternative minimum tax depreciation adjustment for qualified Liberty Zone property. Can you e file an amended return Classification of Liberty Zone leasehold improvement property as 5-year property. Can you e file an amended return Authorization of the issuance of tax-exempt New York Liberty bonds to finance the acquisition, construction, reconstruction, and renovation of nonresidential real property, residential rental property, and public utility property in the Liberty Zone. Can you e file an amended return An increased section 179 deduction for certain Liberty Zone property. Can you e file an amended return Extension of the replacement period from 2 years to 5 years for certain property involuntarily converted as a result of the terrorist attacks on September 11, 2001, but only if substantially all of the use of the replacement property is in New York City. Can you e file an amended return For more information about involuntary conversions, see Postponement of Gain in Publication 547, Casualties, Disasters, and Thefts. Can you e file an amended return In addition, for 2002 and 2003, the work opportunity credit is expanded by creating a new targeted group, consisting generally of employees who work in the Liberty Zone or, in certain cases, in New York City outside the Liberty Zone. Can you e file an amended return For more information, see Work Opportunity Credit Expanded in New York Liberty Zone under 2002 Changes, later. Can you e file an amended return For more information about the 30% special depreciation allowance, Liberty Zone leasehold improvement property, or increased section 179 deduction, see New York Liberty Zone Benefits, in chapter 5. Can you e file an amended return In addition, the tax benefits for the Liberty Zone will be covered in a new edition of Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities, available later in 2002. Can you e file an amended return Other 2001 Changes Other changes are discussed in the following chapters. Can you e file an amended return Chapter 4 Car Expenses Chapter 5 Depreciation 2002 Changes Nonaccrual-Experience Method Under current law, if you perform services and use an accrual method of accounting, you do not accrue income which, based on experience, you expect to be uncollectible. Can you e file an amended return Beginning in 2002, this rule only applies if you perform services in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, and consulting, or your average annual gross receipts for the 3 prior tax years does not exceed $5,000,000. Can you e file an amended return As under current law, the nonaccrual-experience method will not apply to amounts on which you charge interest or a late payment penalty. Can you e file an amended return For more information, see Nonaccrual-Experience Method in chapter 11 of Publication 535, Business Expenses. Can you e file an amended return Issuance of Qualified Zone Academy Bonds State and local governments issue qualified zone academy bonds to raise funds for the use of qualified zone academies. Can you e file an amended return The amount of bonds that may be issued was limited to $400 million each year for 1998, 1999, 2000, and 2001. Can you e file an amended return This provision has been extended to provide for an additional $400 million of bonds to be issued each year for 2002 and 2003. Can you e file an amended return For more information about qualified zone academy bonds, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. Can you e file an amended return Depletion The suspension of the taxable income limit on percentage depletion from the marginal production of oil and natural gas that was scheduled to expire for tax years beginning after 2001 has been extended to tax years beginning before 2004. Can you e file an amended return For more information on marginal production, see section 613A(c) of the Internal Revenue Code. Can you e file an amended return Work Opportunity Credit Expanded in New York Liberty Zone The work opportunity credit is expanded to include a new targeted group consisting generally of employees who perform substantially all their services: In the New York Liberty Zone (defined earlier under Tax Incentives for New York Liberty Zone, under 2001 Changes), or Elsewhere in New York City for a business that relocated from the Liberty Zone due to the destruction or damage of its place of business by the September 11, 2001, terrorist attack. Can you e file an amended return The credit is available to employers for wages paid to new employees and existing employees for work performed during 2002 or 2003. Can you e file an amended return Certain limits apply. Can you e file an amended return For more information about the work opportunity credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. Can you e file an amended return Credit For Pension Plan Startup Costs The credit for pension plan startup costs is now allowed for plans that become effective after December 31, 2001. Can you e file an amended return Previously, the credit was only allowed for plans established after December 31, 2001. Can you e file an amended return For more information on the credit, see Important Changes for 2002 in Publication 560, Retirement Plans for Small Business. Can you e file an amended return Welfare-to-Work Credit Extended The welfare-to-work credit that was scheduled to expire for wages paid to individuals who began working for you after 2001 has been extended to include wages paid to qualified individuals who begin work for you in 2002 or 2003. Can you e file an amended return For more information on the welfare-to-work credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. Can you e file an amended return Work Opportunity Credit Extended The work opportunity credit that was scheduled to expire for wages paid to individuals who began working for you after 2001 has been extended to include wages paid to qualified individuals who begin work for you in 2002 or 2003. Can you e file an amended return For more information about the work opportunity credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. Can you e file an amended return Electric and Clean-Fuel Vehicles The maximum clean-fuel vehicle deduction and qualified electric vehicle credit were scheduled to be 25% lower for 2002 and both were scheduled to be phased out completely by 2005. Can you e file an amended return The full deduction and credit are now allowed for qualified property placed in service in 2002 and 2003. Can you e file an amended return The phaseout of the deduction and the credit will begin in 2004, and no deduction or credit will be allowed for property placed in service after 2006. Can you e file an amended return For more information about electric and clean-fuel vehicles, see chapter 12 in Publication 535, Business Expenses. Can you e file an amended return Renewable Electricity Production Credit The renewable electricity production credit is extended to include electricity produced by facilities placed in service after 2001 and before 2004. Can you e file an amended return Later Changes Special Depreciation Allowance You can claim the special depreciation allowance (an additional 30% depreciation deduction) for new property that you acquire before September 11, 2004, and place in service for your business generally before January 1, 2005, if you meet the other requirements for qualified property covered in chapter 5. Can you e file an amended return Accordingly, you will generally no longer be able to claim the special depreciation allowance for the qualified property if you acquire it after September 10, 2004, or place it in service for your business after December 31, 2004. Can you e file an amended return However, you will be able to claim the special Liberty Zone depreciation allowance (an additional 30% depreciation deduction) for most qualified property if you place it in service in the Liberty Zone after December 31, 2004, and generally before January 1, 2007, provided you meet the other requirements for qualified Liberty Zone property covered in chapter 5. Can you e file an amended return Extension of Placed in Service Date To qualify for the special depreciation allowance, your property must meet certain tests, including the placed in service date test, as well as the other requirements covered in chapter 5 of this publication. Can you e file an amended return To meet the placed in service date test, your property must generally be placed in service for use in your trade or business or for the production of income after September 10, 2001, and before January 1, 2005. Can you e file an amended return However, certain property placed in service before January 1, 2006, may meet this test. Can you e file an amended return Transportation property and property with a recovery period of 10 years or longer meet the test if one of the following applies. Can you e file an amended return The property has an estimated production period of more than 2 years. Can you e file an amended return The property has an estimated production period of more than 1 year and it costs more than $1 million. Can you e file an amended return Transportation property is any tangible personal property used in the trade or business of transporting persons or property. Can you e file an amended return For property that qualifies for the special depreciation allowance solely because of the one-year extension of the placed in service date, only the part of the basis attributable to manufacture, construction, or production before September 11, 2004, is eligible for the special depreciation allowance. Can you e file an amended return Special Liberty Zone Depreciation Allowance for New and Used Property You can claim the special Liberty Zone depreciation allowance (an additional 30% depreciation deduction) for used property that you acquire after September 10, 2001, if the property meets the requirements listed under Qualified Liberty Zone Property in chapter 5 of this publication. Can you e file an amended return You will be able to claim the allowance for both new and used property that you acquire after September 10, 2004, provided the property meets the other requirements for qualified Liberty Zone property. Can you e file an amended return Depreciation of Property Used on Indian Reservations The special depreciation rules that apply to qualified property used on an Indian reservation were scheduled to expire for property placed in service after 2003. Can you e file an amended return These special rules have been extended to include property placed in service in 2004. Can you e file an amended return For more information about these rules, see Publication 946, How To Depreciate Property. Can you e file an amended return Indian Employment Credit Extended The Indian employment credit that was scheduled to expire for tax years beginning after 2003 has been extended to include a tax year beginning in 2004. Can you e file an amended return For more information about this credit, see Publication 954, Tax Incentives for Empowerment Zones and Other Distressed Communities. Can you e file an amended return Prev  Up  Next   Home   More Online Publications