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Federal Income Tax Form 1040x

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Federal Income Tax Form 1040x

Federal income tax form 1040x Publication 946 - Introductory Material Table of Contents What's New for 2013 What's New for 2014 Reminders IntroductionOrdering forms and publications. Federal income tax form 1040x Tax questions. Federal income tax form 1040x What's New for 2013 Increased section 179 deduction dollar limits. Federal income tax form 1040x  The maximum amount you can elect to deduct for most section 179 property you placed in service in 2013 is $500,000 ($535,000 for qualified enterprise zone property). Federal income tax form 1040x This limit is reduced by the amount by which the cost of the property placed in service during the tax year exceeds $2,000,000. Federal income tax form 1040x See Dollar Limits under How Much Can You Deduct in chapter 2. Federal income tax form 1040x Depreciation limits on business vehicles. Federal income tax form 1040x  The total section 179 deduction and depreciation you can deduct for a passenger automobile (that is not a truck or van) you use in your business and first placed in service in 2013 is $3,160, if the special depreciation allowance does not apply. Federal income tax form 1040x The maximum deduction you can take for a truck or van you use in your business and first placed in service in 2013 is $3,360, if the special depreciation allowance does not apply. Federal income tax form 1040x See Maximum Depreciation Deduction in chapter 5. Federal income tax form 1040x Special allowance for qualified second generation biofuel plant property. Federal income tax form 1040x . Federal income tax form 1040x  For tax years ending after December 31, 2012, you may be able to take a 50% special depreciation allowance for qualified second generation biofuel plant property placed in service after January 2, 2013, and before January 1, 2014. Federal income tax form 1040x Election to accelerate minimum tax credits for round 3 extension property. Federal income tax form 1040x . Federal income tax form 1040x  For tax years ending after December 31, 2012, a corporation can elect to claim pre-2006 unused minimum tax credits in lieu of the special depreciation allowance for round 3 extension property. Federal income tax form 1040x What's New for 2014 Expiration of the increased section 179 deduction limits and expanded definition of section 179 property. Federal income tax form 1040x  For tax years beginning after 2013, the increased section 179 expense deduction limit and threshold amount before reduction in limitation will no longer apply. Federal income tax form 1040x Also, the definition of section 179 property will no longer include certain qualified real property. Federal income tax form 1040x Expiration of the 7-year recovery period for motor sports entertainment complexes. Federal income tax form 1040x  Qualified motor sports entertainment complex property placed in service after December 31, 2013, will not be treated as 7-year property under MACRS. Federal income tax form 1040x Expiration of the 15-year recovery period for qualified leasehold improvement, restaurant, and retail improvement properties. Federal income tax form 1040x  Qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property placed in service after December 31, 2013, will not be treated as 15-year property under MACRS. Federal income tax form 1040x Expiration of the accelerated depreciation for qualified Indian reservation property. Federal income tax form 1040x  The accelerated depreciation of property on an Indian Reservation will not apply to property placed in service after December 31, 2013. Federal income tax form 1040x Expiration of the 3-year recovery period for certain race horses. Federal income tax form 1040x  The 3-year recovery period for race horses two years old or younger will expire for such horses placed in service after December 31, 2013. Federal income tax form 1040x Reminders Photographs of missing children. Federal income tax form 1040x  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Federal income tax form 1040x Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Federal income tax form 1040x You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Federal income tax form 1040x Introduction Future developments. Federal income tax form 1040x   For the latest information about developments related to Publication 946 such as legislation enacted after this publication was published, go to www. Federal income tax form 1040x irs. Federal income tax form 1040x gov/pub946. Federal income tax form 1040x This publication explains how you can recover the cost of business or income-producing property through deductions for depreciation (for example, the special depreciation allowance and deductions under the Modified Accelerated Cost Recovery System (MACRS)). Federal income tax form 1040x It also explains how you can elect to take a section 179 deduction, instead of depreciation deductions, for certain property, and the additional rules for listed property. Federal income tax form 1040x The depreciation methods discussed in this publication generally do not apply to property placed in service before 1987. Federal income tax form 1040x For more information, see Publication 534, Depreciating Property Placed in Service Before 1987. Federal income tax form 1040x Definitions. Federal income tax form 1040x   Many of the terms used in this publication are defined in the Glossary near the end of the publication. Federal income tax form 1040x Glossary terms used in each discussion under the major headings are listed before the beginning of each discussion throughout the publication. Federal income tax form 1040x Do you need a different publication?   The following table shows where you can get more detailed information when depreciating certain types of property. Federal income tax form 1040x For information on depreciating: See Publication: A car 463, Travel, Entertainment, Gift, and Car Expenses Residential rental property 527, Residential Rental Property (Including Rental of Vacation Home) Office space in your home 587, Business Use of Your Home (Including Use by Daycare Providers) Farm property 225, Farmer's Tax Guide Comments and suggestions. Federal income tax form 1040x   We welcome your comments about this publication and your suggestions for future editions. Federal income tax form 1040x   You can write to us at the following address: Internal Revenue Service Business, Exempt Organizations and International Forms and Publications Branch SE:W:CAR:MP:T:B 1111 Constitution Ave. Federal income tax form 1040x NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Federal income tax form 1040x Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Federal income tax form 1040x   You can send us comments from www. Federal income tax form 1040x irs. Federal income tax form 1040x gov/formspubs/. Federal income tax form 1040x Select “Comment on Tax Forms and Publications” under “More Information. Federal income tax form 1040x ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Federal income tax form 1040x Ordering forms and publications. Federal income tax form 1040x   Visit www. Federal income tax form 1040x irs. Federal income tax form 1040x gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Federal income tax form 1040x Internal Revenue Service 1201 N. Federal income tax form 1040x Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Federal income tax form 1040x   If you have a tax question, check the information available on IRS. Federal income tax form 1040x gov or call 1-800-829-1040. Federal income tax form 1040x We cannot answer tax questions sent to either of the above addresses. Federal income tax form 1040x Prev  Up  Next   Home   More Online Publications
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The Federal Income Tax Form 1040x

Federal income tax form 1040x 5. Federal income tax form 1040x   Personal Use of Dwelling Unit (Including Vacation Home) Table of Contents Dividing Expenses Dwelling Unit Used as a HomeMain home. Federal income tax form 1040x Shared equity financing agreement. Federal income tax form 1040x Donation of use of the property. Federal income tax form 1040x Examples. Federal income tax form 1040x Days used for repairs and maintenance. Federal income tax form 1040x Days used as a main home before or after renting. Federal income tax form 1040x Reporting Income and DeductionsNot used as a home. Federal income tax form 1040x Used as a home but rented less than 15 days. Federal income tax form 1040x Used as a home and rented 15 days or more. Federal income tax form 1040x If you have any personal use of a dwelling unit (including a vacation home) that you rent, you must divide your expenses between rental use and personal use. Federal income tax form 1040x In general, your rental expenses will be no more than your total expenses multiplied by a fraction; the denominator of which is the total number of days the dwelling unit is used and the numerator of which is the total number of days actually rented at a fair rental price. Federal income tax form 1040x Only your rental expenses may deducted on Schedule E (Form 1040). Federal income tax form 1040x Some of your personal expenses may be deductible if you itemize your deductions on Schedule A (Form 1040). Federal income tax form 1040x You must also determine if the dwelling unit is considered a home. Federal income tax form 1040x The amount of rental expenses that you can deduct may be limited if the dwelling unit is considered a home. Federal income tax form 1040x Whether a dwelling unit is considered a home depends on how many days during the year are considered to be days of personal use. Federal income tax form 1040x There is a special rule if you used the dwelling unit as a home and you rented it for less than 15 days during the year. Federal income tax form 1040x Dwelling unit. Federal income tax form 1040x   A dwelling unit includes a house, apartment, condominium, mobile home, boat, vacation home, or similar property. Federal income tax form 1040x It also includes all structures or other property belonging to the dwelling unit. Federal income tax form 1040x A dwelling unit has basic living accommodations, such as sleeping space, a toilet, and cooking facilities. Federal income tax form 1040x   A dwelling unit does not include property (or part of the property) used solely as a hotel, motel, inn, or similar establishment. Federal income tax form 1040x Property is used solely as a hotel, motel, inn, or similar establishment if it is regularly available for occupancy by paying customers and is not used by an owner as a home during the year. Federal income tax form 1040x Example. Federal income tax form 1040x You rent a room in your home that is always available for short-term occupancy by paying customers. Federal income tax form 1040x You do not use the room yourself and you allow only paying customers to use the room. Federal income tax form 1040x This room is used solely as a hotel, motel, inn, or similar establishment and is not a dwelling unit. Federal income tax form 1040x Dividing Expenses If you use a dwelling unit for both rental and personal purposes, divide your expenses between the rental use and the personal use based on the number of days used for each purpose. Federal income tax form 1040x When dividing your expenses, follow these rules. Federal income tax form 1040x Any day that the unit is rented at a fair rental price is a day of rental use even if you used the unit for personal purposes that day. Federal income tax form 1040x (This rule does not apply when determining whether you used the unit as a home. Federal income tax form 1040x ) Any day that the unit is available for rent but not actually rented is not a day of rental use. Federal income tax form 1040x Fair rental price. Federal income tax form 1040x   A fair rental price for your property generally is the amount of rent that a person who is not related to you would be willing to pay. Federal income tax form 1040x The rent you charge is not a fair rental price if it is substantially less than the rents charged for other properties that are similar to your property in your area. Federal income tax form 1040x   Ask yourself the following questions when comparing another property with yours. Federal income tax form 1040x Is it used for the same purpose? Is it approximately the same size? Is it in approximately the same condition? Does it have similar furnishings? Is it in a similar location? If any of the answers are no, the properties probably are not similar. Federal income tax form 1040x Example. Federal income tax form 1040x Your beach cottage was available for rent from June 1 through August 31 (92 days). Federal income tax form 1040x Except for the first week in August (7 days), when you were unable to find a renter, you rented the cottage at a fair rental price during that time. Federal income tax form 1040x The person who rented the cottage for July allowed you to use it over the weekend (2 days) without any reduction in or refund of rent. Federal income tax form 1040x Your family also used the cottage during the last 2 weeks of May (14 days). Federal income tax form 1040x The cottage was not used at all before May 17 or after August 31. Federal income tax form 1040x You figure the part of the cottage expenses to treat as rental expenses as follows. Federal income tax form 1040x The cottage was used for rental a total of 85 days (92 − 7). Federal income tax form 1040x The days it was available for rent but not rented (7 days) are not days of rental use. Federal income tax form 1040x The July weekend (2 days) you used it is rental use because you received a fair rental price for the weekend. Federal income tax form 1040x You used the cottage for personal purposes for 14 days (the last 2 weeks in May). Federal income tax form 1040x The total use of the cottage was 99 days (14 days personal use + 85 days rental use). Federal income tax form 1040x Your rental expenses are 85/99 (86%) of the cottage expenses. Federal income tax form 1040x Note. Federal income tax form 1040x When determining whether you used the cottage as a home, the July weekend (2 days) you used it is considered personal use even though you received a fair rental price for the weekend. Federal income tax form 1040x Therefore, you had 16 days of personal use and 83 days of rental use for this purpose. Federal income tax form 1040x Because you used the cottage for personal purposes more than 14 days and more than 10% of the days of rental use (8 days), you used it as a home. Federal income tax form 1040x If you have a net loss, you may not be able to deduct all of the rental expenses. Federal income tax form 1040x See Dwelling Unit Used as a Home, next. Federal income tax form 1040x Dwelling Unit Used as a Home If you use a dwelling unit for both rental and personal purposes, the tax treatment of the rental expenses you figured earlier under Dividing Expenses and rental income depends on whether you are considered to be using the dwelling unit as a home. Federal income tax form 1040x You use a dwelling unit as a home during the tax year if you use it for personal purposes more than the greater of: 14 days, or 10% of the total days it is rented to others at a fair rental price. Federal income tax form 1040x See What is a day of personal use , later. Federal income tax form 1040x If a dwelling unit is used for personal purposes on a day it is rented at a fair rental price (discussed earlier), do not count that day as a day of rental use in applying (2) above. Federal income tax form 1040x Instead, count it as a day of personal use in applying both (1) and (2) above. Federal income tax form 1040x What is a day of personal use?   A day of personal use of a dwelling unit is any day that the unit is used by any of the following persons. Federal income tax form 1040x You or any other person who owns an interest in it, unless you rent it to another owner as his or her main home under a shared equity financing agreement (defined later). Federal income tax form 1040x However, see Days used as a main home before or after renting , later. Federal income tax form 1040x A member of your family or a member of the family of any other person who owns an interest in it, unless the family member uses the dwelling unit as his or her main home and pays a fair rental price. Federal income tax form 1040x Family includes only your spouse, brothers and sisters, half-brothers and half-sisters, ancestors (parents, grandparents, etc. Federal income tax form 1040x ), and lineal descendants (children, grandchildren, etc. Federal income tax form 1040x ). Federal income tax form 1040x Anyone under an arrangement that lets you use some other dwelling unit. Federal income tax form 1040x Anyone at less than a fair rental price. Federal income tax form 1040x Main home. Federal income tax form 1040x   If the other person or member of the family in (1) or (2) above has more than one home, his or her main home is ordinarily the one he or she lived in most of the time. Federal income tax form 1040x Shared equity financing agreement. Federal income tax form 1040x   This is an agreement under which two or more persons acquire undivided interests for more than 50 years in an entire dwelling unit, including the land, and one or more of the co-owners is entitled to occupy the unit as his or her main home upon payment of rent to the other co-owner or owners. Federal income tax form 1040x Donation of use of the property. Federal income tax form 1040x   You use a dwelling unit for personal purposes if: You donate the use of the unit to a charitable organization, The organization sells the use of the unit at a fund-raising event, and The “purchaser” uses the unit. Federal income tax form 1040x Examples. Federal income tax form 1040x   The following examples show how to determine if you have days of personal use. Federal income tax form 1040x Example 1. Federal income tax form 1040x You and your neighbor are co-owners of a condominium at the beach. Federal income tax form 1040x Last year, you rented the unit to vacationers whenever possible. Federal income tax form 1040x The unit was not used as a main home by anyone. Federal income tax form 1040x Your neighbor used the unit for 2 weeks last year; you did not use it at all. Federal income tax form 1040x Because your neighbor has an interest in the unit, both of you are considered to have used the unit for personal purposes during those 2 weeks. Federal income tax form 1040x Example 2. Federal income tax form 1040x You and your neighbors are co-owners of a house under a shared equity financing agreement. Federal income tax form 1040x Your neighbors live in the house and pay you a fair rental price. Federal income tax form 1040x Even though your neighbors have an interest in the house, the days your neighbors live there are not counted as days of personal use by you. Federal income tax form 1040x This is because your neighbors rent the house as their main home under a shared equity financing agreement. Federal income tax form 1040x Example 3. Federal income tax form 1040x You own a rental property that you rent to your son. Federal income tax form 1040x Your son does not own any interest in this property. Federal income tax form 1040x He uses it as his main home and pays you a fair rental price. Federal income tax form 1040x Your son's use of the property is not personal use by you because your son is using it as his main home, he owns no interest in the property, and he is paying you a fair rental price. Federal income tax form 1040x Example 4. Federal income tax form 1040x You rent your beach house to Rosa. Federal income tax form 1040x Rosa rents her cabin in the mountains to you. Federal income tax form 1040x You each pay a fair rental price. Federal income tax form 1040x You are using your beach house for personal purposes on the days that Rosa uses it because your house is used by Rosa under an arrangement that allows you to use her cabin. Federal income tax form 1040x Example 5. Federal income tax form 1040x You rent an apartment to your mother at less than a fair rental price. Federal income tax form 1040x You are using the apartment for personal purposes on the days that your mother rents it because you rent it for less than a fair rental price. Federal income tax form 1040x Days used for repairs and maintenance. Federal income tax form 1040x   Any day that you spend working substantially full time repairing and maintaining (not improving) your property is not counted as a day of personal use. Federal income tax form 1040x Do not count such a day as a day of personal use even if family members use the property for recreational purposes on the same day. Federal income tax form 1040x Example. Federal income tax form 1040x Corey owns a cabin in the mountains that he rents for most of the year. Federal income tax form 1040x He spends a week at the cabin with family members. Federal income tax form 1040x Corey works on maintenance of the cabin 3 or 4 hours each day during the week and spends the rest of the time fishing, hiking, and relaxing. Federal income tax form 1040x Corey's family members, however, work substantially full time on the cabin each day during the week. Federal income tax form 1040x The main purpose of being at the cabin that week is to do maintenance work. Federal income tax form 1040x Therefore, the use of the cabin during the week by Corey and his family will not be considered personal use by Corey. Federal income tax form 1040x Days used as a main home before or after renting. Federal income tax form 1040x   For purposes of determining whether a dwelling unit was used as a home, you may not have to count days you used the property as your main home before or after renting it or offering it for rent as days of personal use. Federal income tax form 1040x Do not count them as days of personal use if: You rented or tried to rent the property for 12 or more consecutive months. Federal income tax form 1040x You rented or tried to rent the property for a period of less than 12 consecutive months and the period ended because you sold or exchanged the property. Federal income tax form 1040x However, this special rule does not apply when dividing expenses between rental and personal use. Federal income tax form 1040x See Property Changed to Rental Use in chapter 4. Federal income tax form 1040x Example 1. Federal income tax form 1040x On February 29, 2012, you moved out of the house you had lived in for 6 years because you accepted a job in another town. Federal income tax form 1040x You rented your house at a fair rental price from March 15, 2012, to May 14, 2013 (14 months). Federal income tax form 1040x On June 1, 2013, you moved back into your old house. Federal income tax form 1040x The days you used the house as your main home from January 1 to February 29, 2012, and from June 1 to December 31, 2013, are not counted as days of personal use. Federal income tax form 1040x Therefore, you would use the rules in chapter 1 when figuring your rental income and expenses. Federal income tax form 1040x Example 2. Federal income tax form 1040x On January 31, you moved out of the condominium where you had lived for 3 years. Federal income tax form 1040x You offered it for rent at a fair rental price beginning on February 1. Federal income tax form 1040x You were unable to rent it until April. Federal income tax form 1040x On September 15, you sold the condominium. Federal income tax form 1040x The days you used the condominium as your main home from January 1 to January 31 are not counted as days of personal use when determining whether you used it as a home. Federal income tax form 1040x Examples. Federal income tax form 1040x   The following examples show how to determine whether you used your rental property as a home. Federal income tax form 1040x Example 1. Federal income tax form 1040x You converted the basement of your home into an apartment with a bedroom, a bathroom, and a small kitchen. Federal income tax form 1040x You rented the basement apartment at a fair rental price to college students during the regular school year. Federal income tax form 1040x You rented to them on a 9-month lease (273 days). Federal income tax form 1040x You figured 10% of the total days rented to others at a fair rental price is 27 days. Federal income tax form 1040x During June (30 days), your brothers stayed with you and lived in the basement apartment rent free. Federal income tax form 1040x Your basement apartment was used as a home because you used it for personal purposes for 30 days. Federal income tax form 1040x Rent-free use by your brothers is considered personal use. Federal income tax form 1040x Your personal use (30 days) is more than the greater of 14 days or 10% of the total days it was rented (27 days). Federal income tax form 1040x Example 2. Federal income tax form 1040x You rented the guest bedroom in your home at a fair rental price during the local college's homecoming, commencement, and football weekends (a total of 27 days). Federal income tax form 1040x Your sister-in-law stayed in the room, rent free, for the last 3 weeks (21 days) in July. Federal income tax form 1040x You figured 10% of the total days rented to others at a fair rental price is 3 days. Federal income tax form 1040x The room was used as a home because you used it for personal purposes for 21 days. Federal income tax form 1040x That is more than the greater of 14 days or 10% of the 27 days it was rented (3 days). Federal income tax form 1040x Example 3. Federal income tax form 1040x You own a condominium apartment in a resort area. Federal income tax form 1040x You rented it at a fair rental price for a total of 170 days during the year. Federal income tax form 1040x For 12 of these days, the tenant was not able to use the apartment and allowed you to use it even though you did not refund any of the rent. Federal income tax form 1040x Your family actually used the apartment for 10 of those days. Federal income tax form 1040x Therefore, the apartment is treated as having been rented for 160 (170 – 10) days. Federal income tax form 1040x You figured 10% of the total days rented to others at a fair rental price is 16 days. Federal income tax form 1040x Your family also used the apartment for 7 other days during the year. Federal income tax form 1040x You used the apartment as a home because you used it for personal purposes for 17 days. Federal income tax form 1040x That is more than the greater of 14 days or 10% of the 160 days it was rented (16 days). Federal income tax form 1040x Minimal rental use. Federal income tax form 1040x   If you use the dwelling unit as a home and you rent it less than 15 days during the year, that period is not treated as rental activity. Federal income tax form 1040x See Used as a home but rented less than 15 days, later, for more information. Federal income tax form 1040x Limit on deductions. Federal income tax form 1040x   Renting a dwelling unit that is considered a home is not a passive activity. Federal income tax form 1040x Instead, if your rental expenses are more than your rental income, some or all of the excess expenses cannot be used to offset income from other sources. Federal income tax form 1040x The excess expenses that cannot be used to offset income from other sources are carried forward to the next year and treated as rental expenses for the same property. Federal income tax form 1040x Any expenses carried forward to the next year will be subject to any limits that apply for that year. Federal income tax form 1040x This limitation will apply to expenses carried forward to another year even if you do not use the property as your home for that subsequent year. Federal income tax form 1040x   To figure your deductible rental expenses for this year and any carryover to next year, use Worksheet 5–1. Federal income tax form 1040x Reporting Income and Deductions Property not used for personal purposes. Federal income tax form 1040x   If you do not use a dwelling unit for personal purposes, see chapter 3 for how to report your rental income and expenses. Federal income tax form 1040x Property used for personal purposes. Federal income tax form 1040x   If you do use a dwelling unit for personal purposes, then how you report your rental income and expenses depends on whether you used the dwelling unit as a home. Federal income tax form 1040x Not used as a home. Federal income tax form 1040x   If you use a dwelling unit for personal purposes, but not as a home, report all the rental income in your income. Federal income tax form 1040x Since you used the dwelling unit for personal purposes, you must divide your expenses between the rental use and the personal use as described earlier in this chapter under Dividing Expenses . Federal income tax form 1040x The expenses for personal use are not deductible as rental expenses. Federal income tax form 1040x   Your deductible rental expenses can be more than your gross rental income; however, see Limits on Rental Losses in chapter 3. Federal income tax form 1040x Used as a home but rented less than 15 days. Federal income tax form 1040x   If you use a dwelling unit as a home and you rent it less than 15 days during the year, its primary function is not considered to be rental and it should not be reported on Schedule E (Form 1040). Federal income tax form 1040x You are not required to report the rental income and rental expenses from this activity. Federal income tax form 1040x The expenses, including qualified mortgage interest, property taxes, and any qualified casualty loss will be reported as normally allowed on Schedule A (Form 1040). Federal income tax form 1040x See the Instructions for Schedule A (Form 1040) for more information on deducting these expenses. Federal income tax form 1040x Used as a home and rented 15 days or more. Federal income tax form 1040x   If you use a dwelling unit as a home and rent it 15 days or more during the year, include all your rental income in your income. Federal income tax form 1040x Since you used the dwelling unit for personal purposes, you must divide your expenses between the rental use and the personal use as described earlier in this chapter under Dividing Expenses . Federal income tax form 1040x The expenses for personal use are not deductible as rental expenses. Federal income tax form 1040x   If you had a net profit from renting the dwelling unit for the year (that is, if your rental income is more than the total of your rental expenses, including depreciation), deduct all of your rental expenses. Federal income tax form 1040x You do not need to use Worksheet 5-1. Federal income tax form 1040x   However, if you had a net loss from renting the dwelling unit for the year, your deduction for certain rental expenses is limited. Federal income tax form 1040x To figure your deductible rental expenses and any carryover to next year, use Worksheet 5–1. Federal income tax form 1040x Worksheet 5-1. Federal income tax form 1040x Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Use this worksheet only if you answer “yes” to all of the following questions. Federal income tax form 1040x Did you use the dwelling unit as a home this year? (See Dwelling Unit Used as a Home . Federal income tax form 1040x ) Did you rent the dwelling unit at a fair rental price 15 days or more this year? Is the total of your rental expenses and depreciation more than your rental income? PART I. Federal income tax form 1040x Rental Use Percentage A. Federal income tax form 1040x Total days available for rent at fair rental price A. Federal income tax form 1040x       B. Federal income tax form 1040x Total days available for rent (line A) but not rented B. Federal income tax form 1040x       C. Federal income tax form 1040x Total days of rental use. Federal income tax form 1040x Subtract line B from line A C. Federal income tax form 1040x       D. Federal income tax form 1040x Total days of personal use (including days rented at less than fair rental price) D. Federal income tax form 1040x       E. Federal income tax form 1040x Total days of rental and personal use. Federal income tax form 1040x Add lines C and D E. Federal income tax form 1040x       F. Federal income tax form 1040x Percentage of expenses allowed for rental. Federal income tax form 1040x Divide line C by line E     F. Federal income tax form 1040x . Federal income tax form 1040x PART II. Federal income tax form 1040x Allowable Rental Expenses 1. Federal income tax form 1040x Enter rents received 1. Federal income tax form 1040x   2a. Federal income tax form 1040x Enter the rental portion of deductible home mortgage interest and qualified mortgage insurance premiums (see instructions) 2a. Federal income tax form 1040x       b. Federal income tax form 1040x Enter the rental portion of real estate taxes b. Federal income tax form 1040x       c. Federal income tax form 1040x Enter the rental portion of deductible casualty and theft losses (see instructions) c. Federal income tax form 1040x       d. Federal income tax form 1040x Enter direct rental expenses (see instructions) d. Federal income tax form 1040x       e. Federal income tax form 1040x Fully deductible rental expenses. Federal income tax form 1040x Add lines 2a–2d. Federal income tax form 1040x Enter here and  on the appropriate lines on Schedule E (see instructions) 2e. Federal income tax form 1040x   3. Federal income tax form 1040x Subtract line 2e from line 1. Federal income tax form 1040x If zero or less, enter -0- 3. Federal income tax form 1040x   4a. Federal income tax form 1040x Enter the rental portion of expenses directly related to operating or maintaining  the dwelling unit (such as repairs, insurance, and utilities) 4a. Federal income tax form 1040x       b. Federal income tax form 1040x Enter the rental portion of excess mortgage interest and qualified mortgage insurance premiums (see instructions) b. Federal income tax form 1040x       c. Federal income tax form 1040x Carryover of operating expenses from 2012 worksheet c. Federal income tax form 1040x       d. Federal income tax form 1040x Add lines 4a–4c d. Federal income tax form 1040x       e. Federal income tax form 1040x Allowable expenses. Federal income tax form 1040x Enter the smaller of line 3 or line 4d (see instructions) 4e. Federal income tax form 1040x   5. Federal income tax form 1040x Subtract line 4e from line 3. Federal income tax form 1040x If zero or less, enter -0- 5. Federal income tax form 1040x   6a. Federal income tax form 1040x Enter the rental portion of excess casualty and theft losses (see instructions) 6a. Federal income tax form 1040x       b. Federal income tax form 1040x Enter the rental portion of depreciation of the dwelling unit b. Federal income tax form 1040x       c. Federal income tax form 1040x Carryover of excess casualty losses and depreciation from 2012 worksheet c. Federal income tax form 1040x       d. Federal income tax form 1040x Add lines 6a–6c d. Federal income tax form 1040x       e. Federal income tax form 1040x Allowable excess casualty and theft losses and depreciation. Federal income tax form 1040x Enter the smaller of  line 5 or line 6d (see instructions) 6e. Federal income tax form 1040x   PART III. Federal income tax form 1040x Carryover of Unallowed Expenses to Next Year 7a. Federal income tax form 1040x Operating expenses to be carried over to next year. Federal income tax form 1040x Subtract line 4e from line 4d 7a. Federal income tax form 1040x   b. Federal income tax form 1040x Excess casualty and theft losses and depreciation to be carried over to next year. Federal income tax form 1040x  Subtract line 6e from line 6d b. Federal income tax form 1040x   Worksheet 5-1 Instructions. Federal income tax form 1040x Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Caution. Federal income tax form 1040x Use the percentage determined in Part I, line F, to figure the rental portions to enter on lines 2a–2c, 4a–4b, and 6a–6b of  Part II. Federal income tax form 1040x Line 2a. Federal income tax form 1040x Figure the mortgage interest on the dwelling unit that you could deduct on Schedule A as if you had not rented the unit. Federal income tax form 1040x Do not include interest on a loan that did not benefit the dwelling unit. Federal income tax form 1040x For example, do not include interest on a home equity loan used to pay off credit cards or other personal loans, buy a car, or pay college tuition. Federal income tax form 1040x Include interest on a loan used to buy, build, or improve the dwelling unit, or to refinance such a loan. Federal income tax form 1040x Include the rental portion of this interest in the total you enter on line 2a of the worksheet. Federal income tax form 1040x   Figure the qualified mortgage insurance premiums on the dwelling unit that you could deduct on line 13 of Schedule A as if you had not rented the unit. Federal income tax form 1040x See the Schedule A instructions. Federal income tax form 1040x However, figure your adjusted gross income (Form 1040, line 38) without your rental income and expenses from the dwelling unit. Federal income tax form 1040x See Line 4b to deduct the part of the qualified mortgage insurance premiums not allowed because of the adjusted gross income limit. Federal income tax form 1040x Include the rental portion of the amount from Schedule A, line 13, in the total you enter on line 2a of the worksheet. Federal income tax form 1040x   Note. Federal income tax form 1040x Do not file this Schedule A or use it to figure the amount to deduct on line 13 of that schedule. Federal income tax form 1040x Instead, figure the personal portion on a separate Schedule A. Federal income tax form 1040x If you have deducted mortgage interest or qualified mortgage insurance premiums on the dwelling unit on other forms, such as Schedule C or F, remember to reduce your Schedule A deduction by that amount. Federal income tax form 1040x           Line 2c. Federal income tax form 1040x Figure the casualty and theft losses related to the dwelling unit that you could deduct on Schedule A as if you had not rented the dwelling unit. Federal income tax form 1040x To do this, complete Section A of Form 4684, Casualties and Thefts, treating the losses as personal losses. Federal income tax form 1040x If any of the loss is due to a federally declared disaster, see the Instructions for Form 4684. Federal income tax form 1040x On Form 4684, line 17, enter 10% of your adjusted gross income figured without your rental income and expenses from the dwelling unit. Federal income tax form 1040x Enter the rental portion of the result from Form 4684, line 18, on line 2c of this worksheet. Federal income tax form 1040x   Note. Federal income tax form 1040x Do not file this Form 4684 or use it to figure your personal losses on Schedule A. Federal income tax form 1040x Instead, figure the personal portion on a separate Form 4684. Federal income tax form 1040x           Line 2d. Federal income tax form 1040x Enter the total of your rental expenses that are directly related only to the rental activity. Federal income tax form 1040x These include interest on loans used for rental activities other than to buy, build, or improve the dwelling unit. Federal income tax form 1040x Also include rental agency fees, advertising, office supplies, and depreciation on office equipment used in your rental activity. Federal income tax form 1040x           Line 2e. Federal income tax form 1040x You can deduct the amounts on lines 2a, 2b, 2c, and 2d as rental expenses on Schedule E even if your rental expenses are more than your rental income. Federal income tax form 1040x Enter the amounts on lines 2a, 2b, 2c, and 2d on the appropriate lines of Schedule E. Federal income tax form 1040x           Line 4b. Federal income tax form 1040x On line 2a, you entered the rental portion of the mortgage interest or qualified mortgage insurance premiums you could deduct on Schedule A if you had not rented the dwelling unit. Federal income tax form 1040x If you had additional mortgage interest and qualified mortgage insurance premiums that would not be deductible on Schedule A because of limits imposed on them, enter on line 4b of this worksheet the rental portion of those excess amounts. Federal income tax form 1040x Do not include interest on a loan that did not benefit the dwelling unit  (as explained in the line 2a instructions). Federal income tax form 1040x           Line 4e. Federal income tax form 1040x You can deduct the amounts on lines 4a, 4b, and 4c as rental expenses on Schedule E only to the extent they are not more than the amount on line 4e. Federal income tax form 1040x *           Line 6a. Federal income tax form 1040x To find the rental portion of excess casualty and theft losses, use the Form 4684 you prepared for line 2c of this worksheet. Federal income tax form 1040x   A. Federal income tax form 1040x Enter the amount from Form 4684, line 10       B. Federal income tax form 1040x Enter the rental portion of line A       C. Federal income tax form 1040x Enter the amount from line 2c of this worksheet       D. Federal income tax form 1040x Subtract line C from line B. Federal income tax form 1040x Enter the result here and on line 6a of this worksheet               Line 6e. Federal income tax form 1040x You can deduct the amounts on lines 6a, 6b, and 6c as rental expenses on Schedule E only to the extent they are not more than the amount on line 6e. Federal income tax form 1040x * *Allocating the limited deduction. Federal income tax form 1040x If you cannot deduct all of the amount on line 4d or 6d this year, you can allocate the allowable deduction in any way you wish among the expenses included on line 4d or 6d. Federal income tax form 1040x Enter the amount you allocate to each expense on the appropriate line of Schedule E, Part I. Federal income tax form 1040x Prev  Up  Next   Home   More Online Publications