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Filing Amended Return

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Filing Amended Return

Filing amended return 6. Filing amended return   Dual-Status Tax Year Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Tax Year Income Subject to Tax Restrictions for Dual-Status Taxpayers Exemptions How To Figure TaxIncome Tax Credits and Payments Forms To File When and Where To File Introduction You have a dual-status tax year when you have been both a resident alien and a nonresident alien in the same year. Filing amended return Dual status does not refer to your citizenship; it refers only to your resident status in the United States. Filing amended return In determining your U. Filing amended return S. Filing amended return income tax liability for a dual-status tax year, different rules apply for the part of the year you are a resident of the United States and the part of the year you are a nonresident. Filing amended return The most common dual-status tax years are the years of arrival and departure. Filing amended return See Dual-Status Aliens in chapter 1. Filing amended return If you are married and choose to be treated as a U. Filing amended return S. Filing amended return resident for the entire year, as explained in chapter 1, the rules of this chapter do not apply to you for that year. Filing amended return Topics - This chapter discusses: Income subject to tax, Restrictions for dual-status taxpayers, Exemptions, How to figure the tax, Forms to file, When and where to file, and How to fill out a dual-status return. Filing amended return Useful Items - You may want to see: Publication 503 Child and Dependent Care Expenses 514 Foreign Tax Credit for Individuals 575 Pension and Annuity Income Form (and Instructions) 1040 U. Filing amended return S. Filing amended return Individual Income Tax Return 1040-C U. Filing amended return S. Filing amended return Departing Alien Income Tax Return 1040-ES Estimated Tax for Individuals 1040-ES (NR) U. Filing amended return S. Filing amended return Estimated Tax for Nonresident Alien Individuals 1040NR U. Filing amended return S. Filing amended return Nonresident Alien Income Tax Return 1116 Foreign Tax Credit See chapter 12 for information about getting these publications and forms. Filing amended return Tax Year You must file your tax return on the basis of an annual accounting period called a tax year. Filing amended return If you have not previously established a fiscal tax year, your tax year is the calendar year. Filing amended return A calendar year is 12 consecutive months ending on December 31. Filing amended return If you have previously established a regular fiscal year (12 consecutive months ending on the last day of a month other than December, or a 52–53 week year) and are considered to be a U. Filing amended return S. Filing amended return resident for any calendar year, you will be treated as a U. Filing amended return S. Filing amended return resident for any part of your fiscal year that falls within that calendar year. Filing amended return Income Subject to Tax For the part of the year you are a resident alien, you are taxed on income from all sources. Filing amended return Income from sources outside the United States is taxable if you receive it while you are a resident alien. Filing amended return The income is taxable even if you earned it while you were a nonresident alien or if you became a nonresident alien after receiving it and before the end of the year. Filing amended return For the part of the year you are a nonresident alien, you are taxed on income from U. Filing amended return S. Filing amended return sources and on certain foreign source income treated as effectively connected with a U. Filing amended return S. Filing amended return trade or business. Filing amended return (The rules for treating foreign source income as effectively connected are discussed in chapter 4 under Foreign Income. Filing amended return ) Income from sources outside the United States that is not effectively connected with a trade or business in the United States is not taxable if you receive it while you are a nonresident alien. Filing amended return The income is not taxable even if you earned it while you were a resident alien or if you became a resident alien or a U. Filing amended return S. Filing amended return citizen after receiving it and before the end of the year. Filing amended return Income from U. Filing amended return S. Filing amended return sources is taxable whether you receive it while a nonresident alien or a resident alien unless specifically exempt under the Internal Revenue Code or a tax treaty provision. Filing amended return Generally, tax treaty provisions apply only to the part of the year you were a nonresident. Filing amended return In certain cases, however, treaty provisions may apply while you were a resident alien. Filing amended return See chapter 9 for more information. Filing amended return When determining what income is taxed in the United States, you must consider exemptions under U. Filing amended return S. Filing amended return tax law as well as the reduced tax rates and exemptions provided by tax treaties between the United States and certain foreign countries. Filing amended return For a further discussion of tax treaties, see chapter 9. Filing amended return Restrictions for Dual-Status Taxpayers The following restrictions apply if you are filing a tax return for a dual-status tax year. Filing amended return 1) Standard deduction. Filing amended return   You cannot use the standard deduction allowed on Form 1040. Filing amended return However, you can itemize any allowable deductions. Filing amended return 2) Exemptions. Filing amended return   Your total deduction for the exemptions for your spouse and allowable dependents cannot be more than your taxable income (figured without deducting personal exemptions) for the period you are a resident alien. Filing amended return 3) Head of household. Filing amended return   You cannot use the head of household Tax Table column or Tax Computation Worksheet. Filing amended return 4) Joint return. Filing amended return   You cannot file a joint return. Filing amended return However, see Choosing Resident Alien Status under Dual-Status Aliens in chapter 1. Filing amended return 5) Tax rates. Filing amended return   If you are married and a nonresident of the United States for all or part of the tax year and you do not choose to file jointly as discussed in chapter 1, you must use the Tax Table column or Tax Computation Worksheet for married filing separately to figure your tax on income effectively connected with a U. Filing amended return S. Filing amended return trade or business. Filing amended return You cannot use the Tax Table column or Tax Computation Worksheet for married filing jointly or single. Filing amended return However, you may be able to file as single if you lived apart from your spouse during the last 6 months of the year and you are a: Married resident of Canada, Mexico, or South Korea, or Married U. Filing amended return S. Filing amended return national. Filing amended return  See the instructions for Form 1040NR to see if you qualify. Filing amended return    A U. Filing amended return S. Filing amended return national is an individual who, although not a U. Filing amended return S. Filing amended return citizen, owes his or her allegiance to the United States. Filing amended return U. Filing amended return S. Filing amended return nationals include American Samoans and Northern Mariana Islanders who chose to become U. Filing amended return S. Filing amended return nationals instead of U. Filing amended return S. Filing amended return citizens. Filing amended return 6) Tax credits. Filing amended return   You cannot claim the education credits, the earned income credit, or the credit for the elderly or the disabled unless: You are married, and You choose to be treated as a resident for all of 2013 by filing a joint return with your spouse who is a U. Filing amended return S. Filing amended return citizen or resident, as discussed in chapter 1. Filing amended return Exemptions As a dual-status taxpayer, you usually will be able to claim your own personal exemption. Filing amended return Subject to the general rules for qualification, you can claim exemptions for your spouse and dependents when you figure taxable income for the part of the year you are a resident alien. Filing amended return The amount you can claim for these exemptions is limited to your taxable income (figured before subtracting exemptions) for the part of the year you are a resident alien. Filing amended return You cannot use exemptions (other than your own) to reduce taxable income to less than zero for that period. Filing amended return Special rules apply to exemptions for the part of the tax year you are a nonresident alien if you are a: Resident of Canada, Mexico, or South Korea, U. Filing amended return S. Filing amended return national, or Student or business apprentice from India. Filing amended return For more information, see Exemptions in chapter 5. Filing amended return How To Figure Tax When you figure your U. Filing amended return S. Filing amended return tax for a dual-status year, you are subject to different rules for the part of the year you are a resident and the part of the year you are a nonresident. Filing amended return Income All income for your period of residence and all income that is effectively connected with a trade or business in the United States for your period of nonresidence, after allowable deductions, is added and taxed at the rates that apply to U. Filing amended return S. Filing amended return citizens and residents. Filing amended return Income that is not connected with a trade or business in the United States for your period of nonresidence is subject to the flat 30% rate or lower treaty rate. Filing amended return You cannot take any deductions against this income. Filing amended return Social security and railroad retirement benefits. Filing amended return   During the part of the year you are a nonresident alien, 85% of any U. Filing amended return S. Filing amended return social security benefits (and the equivalent portion of tier 1 railroad retirement benefits) you receive is subject to the flat 30% tax, unless exempt, or subject to a lower treaty rate. Filing amended return (See The 30% Tax in chapter 4. Filing amended return )   During the part of the year you are a resident alien, part of the social security and the equivalent portion of tier 1 railroad retirement benefits will be taxed at graduated rates if your modified adjusted gross income plus half of these benefits is more than a certain base amount. Filing amended return Use the Social Security Benefits Worksheet in the Form 1040 instructions to help you figure the taxable part of your social security and equivalent tier 1 railroad retirement benefits for the part of the year you were a resident alien. Filing amended return If you received U. Filing amended return S. Filing amended return social security benefits while you were a nonresident alien, the Social Security Administration will send you Form SSA-1042S showing your combined benefits for the entire year and the amount of tax withheld. Filing amended return You will not receive separate statements for the benefits received during your periods of U. Filing amended return S. Filing amended return residence and nonresidence. Filing amended return Therefore, it is important for you to keep careful records of these amounts. Filing amended return You will need this information to properly complete your return and determine your tax liability. Filing amended return If you received railroad retirement benefits while you were a nonresident alien, the U. Filing amended return S. Filing amended return Railroad Retirement Board (RRB) will send you Form RRB-1042S, Statement for Nonresident Alien Recipients of Payments by the Railroad Retirement Board, and/or Form RRB-1099-R, Annuities or Pensions by the Railroad Retirement Board. Filing amended return If your country of legal residence changed or your rate of tax changed during the tax year, you may receive more than one form. Filing amended return Tax Credits and Payments This discussion covers tax credits and payments for dual-status aliens. Filing amended return Credits As a dual-status alien, you generally can claim tax credits using the same rules that apply to resident aliens. Filing amended return There are certain restrictions that may apply. Filing amended return These restrictions are discussed here, along with a brief explanation of credits often claimed by individuals. Filing amended return Foreign tax credit. Filing amended return   If you have paid or are liable for the payment of income tax to a foreign country on income from foreign sources, you may be able to claim a credit for the foreign taxes. Filing amended return   If you claim the foreign tax credit, you generally must file Form 1116 with your income tax return. Filing amended return For more information, see the Instructions for Form 1116 and Publication 514. Filing amended return Child and dependent care credit. Filing amended return   You may qualify for this credit if you pay someone to care for your qualifying child who is under age 13, or your disabled dependent or disabled spouse so that you can work or look for work. Filing amended return Generally, you must be able to claim an exemption for your dependent. Filing amended return   Married dual-status aliens can claim the credit only if they choose to file a joint return as discussed in chapter 1, or if they qualify as certain married individuals living apart. Filing amended return   The amount of your child and dependent care expense that qualifies for the credit in any tax year cannot be more than your earned income for that tax year. Filing amended return   For more information, get Publication 503 and Form 2441. Filing amended return Retirement savings contributions credit. Filing amended return   You may qualify for this credit (also known as the saver's credit) if you made eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement (IRA) in 2013. Filing amended return You cannot claim this credit if: You were born after January 1, 1996, You were a full-time student, Your exemption is claimed by someone else on his or her 2013 tax return, or Your adjusted gross income is more than $29,500. Filing amended return Use Form 8880 to figure the credit. Filing amended return For more information, see Publication 590. Filing amended return Child tax credit. Filing amended return   You may be able to take this credit if you have a qualifying child. Filing amended return   A qualifying child for purposes of the child tax credit is a child who: Was under age 17 at the end of 2013. Filing amended return Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew). Filing amended return Is a U. Filing amended return S. Filing amended return citizen, a U. Filing amended return S. Filing amended return national, or a resident alien. Filing amended return Did not provide over half of his or her own support for 2013. Filing amended return Lived with you more than half of 2013. Filing amended return Temporary absences, such as for school, vacation, or medical care, count as time lived in the home. Filing amended return Is claimed as a dependent on your return. Filing amended return An adopted child is always treated as your own child. Filing amended return An adopted child includes a child lawfully placed with you for legal adoption. Filing amended return   See your form instructions for additional details. Filing amended return Adoption credit. Filing amended return   You may qualify to take a tax credit of up to $12,970 for qualifying expenses paid to adopt an eligible child. Filing amended return This amount may be allowed for the adoption of a child with special needs regardless of whether you have qualifying expenses. Filing amended return To claim the adoption credit, file Form 8839 with the U. Filing amended return S. Filing amended return income tax return that you file. Filing amended return   Married dual-status aliens can claim the credit only if they choose to file a joint return with a U. Filing amended return S. Filing amended return citizen or resident spouse as discussed in chapter 1, or if they qualify as certain married individuals living apart (see Married Persons Not Filing Jointly in the Form 8839 instructions). Filing amended return Payments You can report as payments against your U. Filing amended return S. Filing amended return income tax liability certain taxes you paid, are considered to have paid, or that were withheld from your income. Filing amended return These include: Tax withheld from wages earned in the United States, Taxes withheld at the source from various items of income from U. Filing amended return S. Filing amended return sources other than wages, Estimated tax paid with Form 1040-ES or Form 1040-ES (NR), and Tax paid with Form 1040-C, at the time of departure from the United States. Filing amended return Forms To File The U. Filing amended return S. Filing amended return income tax return you must file as a dual-status alien depends on whether you are a resident alien or a nonresident alien at the end of the tax year. Filing amended return Resident at end of year. Filing amended return   You must file Form 1040 if you are a dual-status taxpayer who becomes a resident during the year and who is a U. Filing amended return S. Filing amended return resident on the last day of the tax year. Filing amended return Write “Dual-Status Return” across the top of the return. Filing amended return Attach a statement to your return to show the income for the part of the year you are a nonresident. Filing amended return You can use Form 1040NR or Form 1040NR-EZ as the statement, but be sure to mark “Dual-Status Statement” across the top. Filing amended return Nonresident at end of year. Filing amended return   You must file Form 1040NR or Form 1040NR-EZ if you are a dual-status taxpayer who gives up residence in the United States during the year and who is not a U. Filing amended return S. Filing amended return resident on the last day of the tax year. Filing amended return Write “Dual-Status Return” across the top of the return. Filing amended return Attach a statement to your return to show the income for the part of the year you are a resident. Filing amended return You can use Form 1040 as the statement, but be sure to mark “Dual-Status Statement” across the top. Filing amended return   If you expatriated or terminated your residency in 2013, you may be required to file an expatriation statement (Form 8854) with your tax return. Filing amended return For more information, see Expatriation Tax in chapter 4. Filing amended return Statement. Filing amended return   Any statement must have your name, address, and taxpayer identification number on it. Filing amended return You do not need to sign a separate statement or schedule accompanying your return, because your signature on the return also applies to the supporting statements and schedules. Filing amended return When and Where To File If you are a resident alien on the last day of your tax year and report your income on a calendar year basis, you must file no later than April 15 of the year following the close of your tax year. Filing amended return If you report your income on other than a calendar year basis, file your return no later than the 15th day of the 4th month following the close of your tax year. Filing amended return In either case, file your return with the address for dual-status aliens shown on the back page of the Form 1040 instructions. Filing amended return If you are a nonresident alien on the last day of your tax year and you report your income on a calendar year basis, you must file no later than April 15 of the year following the close of your tax year if you receive wages subject to withholding. Filing amended return If you report your income on other than a calendar year basis, file your return no later than the 15th day of the 4th month following the close of your tax year. Filing amended return If you did not receive wages subject to withholding and you report your income on a calendar year basis, you must file no later than June 15 of the year following the close of your tax year. Filing amended return If you report your income on other than a calendar year basis, file your return no later than the 15th day of the 6th month following the close of your tax year. Filing amended return In any case, mail your return to:  Department of the Treasury Internal Revenue Service  Austin, TX 73301-0215 If enclosing a payment, mail your return to:  Internal Revenue Service  P. Filing amended return O. Filing amended return Box 1303 Charlotte, NC 28201-1303 If the regular due date for filing falls on a Saturday, Sunday, or legal holiday, the due date is the next day that is not a Saturday, Sunday, or legal holiday. Filing amended return Prev  Up  Next   Home   More Online Publications
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The Filing Amended Return

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