File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Free Tax Filing For Federal And State

2011 Tax Forms 1040Amend 2011 Tax Return OnlineH & R Block Tax ReturnIrs 1040ez Form 2013Federal Income Tax ReturnIrs Free FileBlank Printable 1040ez FormHow Do I File 2011 Tax Return2011 1040a Tax FormHow Do I Amend My 2012 Tax Return Online2012 Free State Tax FilingFree Tax ReturnsFree E-file 2012 Taxes1040ez Tax TablesTax Forms For StudentsFiling 2010 Taxes Late OnlineForm 1040ez 2011 InstructionsIrs 1040v Form1040ez 2011 File OnlineHow To Amend My 2011 Taxes1040ez Tax Instructions2011 Tax PrepFile Taxes For FreeW2 Ez FormTaxact 2011 LoginUs Government Form 1040xRevise Tax ReturnDo I Amend Tax ReturnFiling Taxes 2014State Income Tax EfileAmending A Tax Return With TurbotaxHow Do I File My 2011 TaxesDownload 1040ez1040a Tax Form For 2012How To File 2011 Tax ReturnFree Online Tax1040ez Form For 20121040 Ez Form 2012Federal 1040ez FormCompare State Income Taxes

Free Tax Filing For Federal And State

Free tax filing for federal and state 2. Free tax filing for federal and state   Foreclosures and Repossessions Table of Contents Amount realized and ordinary income on a recourse debt. Free tax filing for federal and state Amount realized on a nonrecourse debt. Free tax filing for federal and state If you do not make payments you owe on a loan secured by property, the lender may foreclose on the loan or repossess the property. Free tax filing for federal and state The foreclosure or repossession is treated as a sale from which you may realize gain or loss. Free tax filing for federal and state This is true even if you voluntarily return the property to the lender. Free tax filing for federal and state If the outstanding loan balance was more than the FMV of the property and the lender cancels all or part of the remaining loan balance, you also may realize ordinary income from the cancellation of debt. Free tax filing for federal and state You must report this income on your return unless certain exceptions or exclusions apply. Free tax filing for federal and state See chapter 1 for more details. Free tax filing for federal and state Borrower's gain or loss. Free tax filing for federal and state    You figure and report gain or loss from a foreclosure or repossession in the same way as gain or loss from a sale. Free tax filing for federal and state The gain is the difference between the amount realized and your adjusted basis in the transferred property (amount realized minus adjusted basis). Free tax filing for federal and state The loss is the difference between your adjusted basis in the transferred property and the amount realized (adjusted basis minus amount realized). Free tax filing for federal and state For more information on figuring gain or loss from the sale of property, see Gain or Loss From Sales and Exchanges in Publication 544. Free tax filing for federal and state You can use Table 1-1 to figure your ordinary income from the cancellation of debt and your gain or loss from a foreclosure or repossession. Free tax filing for federal and state Amount realized and ordinary income on a recourse debt. Free tax filing for federal and state    If you are personally liable for the debt, the amount realized on the foreclosure or repossession includes the smaller of: The outstanding debt immediately before the transfer reduced by any amount for which you remain personally liable immediately after the transfer, or The FMV of the transferred property. Free tax filing for federal and state The amount realized also includes any proceeds you received from the foreclosure sale. Free tax filing for federal and state If the FMV of the transferred property is less than the total outstanding debt immediately before the transfer reduced by any amount for which you remain personally liable immediately after the transfer, the difference is ordinary income from the cancellation of debt. Free tax filing for federal and state You must report this income on your return unless certain exceptions or exclusions apply. Free tax filing for federal and state See chapter 1 for more details. Free tax filing for federal and state       Example 1. Free tax filing for federal and state Tara bought a new car for $15,000. Free tax filing for federal and state She made a $2,000 downpayment and borrowed the remaining $13,000 from the dealer's credit company. Free tax filing for federal and state Tara is personally liable for the loan (recourse debt) and the car is pledged as security for the loan. Free tax filing for federal and state On August 1, 2013, the credit company repossessed the car because Tara had stopped making loan payments. Free tax filing for federal and state The balance due after taking into account the payments Tara made was $10,000. Free tax filing for federal and state The FMV of the car when it was repossessed was $9,000. Free tax filing for federal and state On November 15, 2013, the credit company forgave the remaining $1,000 balance on the loan due to insufficient assets. Free tax filing for federal and state In this case, the amount Tara realizes is $9,000. Free tax filing for federal and state This is the smaller of: The $10,000 outstanding debt immediately before the repossession reduced by the $1,000 for which she remains personally liable immediately after the repossession ($10,000 − $1,000 = $9,000), or The $9,000 FMV of the car. Free tax filing for federal and state Tara figures her gain or loss on the repossession by comparing the $9,000 amount realized with her $15,000 adjusted basis. Free tax filing for federal and state She has a $6,000 nondeductible loss. Free tax filing for federal and state After the cancellation of the remaining balance on the loan in November, Tara also has ordinary income from cancellation of debt in the amount of $1,000 (the remaining balance on the $10,000 loan after the $9,000 amount satisfied by the FMV of the repossessed car). Free tax filing for federal and state Tara must report this $1,000 on her return unless one of the exceptions or exclusions described in chapter 1 applies. Free tax filing for federal and state Example 2. Free tax filing for federal and state Lili paid $200,000 for her home. Free tax filing for federal and state She made a $15,000 downpayment and borrowed the remaining $185,000 from a bank. Free tax filing for federal and state Lili is personally liable for the mortgage loan and the house secures the loan. Free tax filing for federal and state In 2013, the bank foreclosed on the mortgage because Lili stopped making payments. Free tax filing for federal and state When the bank foreclosed the mortgage, the balance due was $180,000, the FMV of the house was $170,000, and Lili's adjusted basis was $175,000 due to a casualty loss she had deducted. Free tax filing for federal and state At the time of the foreclosure, the bank forgave $2,000 of the $10,000 debt in excess of the FMV ($180,000 minus $170,000). Free tax filing for federal and state She remained personally liable for the $8,000 balance. Free tax filing for federal and state In this case, Lili has ordinary income from the cancellation of debt in the amount of $2,000. Free tax filing for federal and state The $2,000 income from the cancellation of debt is figured by subtracting the $170,000 FMV of the house from the $172,000 difference between her total outstanding debt immediately before the transfer of property and the amount for which she remains personally liable immediately after the transfer ($180,000 minus $8,000). Free tax filing for federal and state She is able to exclude the $2,000 of canceled debt from her income under the qualified principal residence indebtedness rules discussed earlier. Free tax filing for federal and state Lili must also determine her gain or loss from the foreclosure. Free tax filing for federal and state In this case, the amount that she realizes is $170,000. Free tax filing for federal and state This is the smaller of: (a) the $180,000 outstanding debt immediately before the transfer reduced by the $8,000 for which she remains personally liable immediately after the transfer ($180,000 − $8,000 = $172,000) or (b) the $170,000 FMV of the house. Free tax filing for federal and state Lili figures her gain or loss on the foreclosure by comparing the $170,000 amount realized with her $175,000 adjusted basis. Free tax filing for federal and state She has a $5,000 nondeductible loss. Free tax filing for federal and state Table 1-1. Free tax filing for federal and state Worksheet for Foreclosures and Repossessions Part 1. Free tax filing for federal and state Complete Part 1 only if you were personally liable for the debt (even if none of the debt was canceled). Free tax filing for federal and state Otherwise, go to Part 2. Free tax filing for federal and state 1. Free tax filing for federal and state Enter the amount of outstanding debt immediately before the transfer of property reduced by any amount for which you remain personally liable immediately after the transfer of property   2. Free tax filing for federal and state Enter the fair market value of the transferred property   3. Free tax filing for federal and state Ordinary income from the cancellation of debt upon foreclosure or repossession. Free tax filing for federal and state * Subtract line 2 from line 1. Free tax filing for federal and state If less than zero, enter zero. Free tax filing for federal and state Next, go to Part 2   Part 2. Free tax filing for federal and state Gain or loss from foreclosure or repossession. Free tax filing for federal and state   4. Free tax filing for federal and state Enter the smaller of line 1 or line 2. Free tax filing for federal and state If you did not complete Part 1 (because you were not personally liable for the debt), enter the amount of outstanding debt immediately before the transfer of property   5. Free tax filing for federal and state Enter any proceeds you received from the foreclosure sale   6. Free tax filing for federal and state Add line 4 and line 5   7. Free tax filing for federal and state Enter the adjusted basis of the transferred property   8. Free tax filing for federal and state Gain or loss from foreclosure or repossession. Free tax filing for federal and state Subtract line 7 from line 6   * The income may not be taxable. Free tax filing for federal and state See chapter 1 for more details. Free tax filing for federal and state Amount realized on a nonrecourse debt. Free tax filing for federal and state    If you are not personally liable for repaying the debt secured by the transferred property, the amount you realize includes the full amount of the outstanding debt immediately before the transfer. Free tax filing for federal and state This is true even if the FMV of the property is less than the outstanding debt immediately before the transfer. Free tax filing for federal and state Example 1. Free tax filing for federal and state Tara bought a new car for $15,000. Free tax filing for federal and state She made a $2,000 downpayment and borrowed the remaining $13,000 from the dealer's credit company. Free tax filing for federal and state Tara is not personally liable for the loan (nonrecourse), but pledged the new car as security for the loan. Free tax filing for federal and state On August 1, 2013, the credit company repossessed the car because Tara had stopped making loan payments. Free tax filing for federal and state The balance due after taking into account the payments Tara made was $10,000. Free tax filing for federal and state The FMV of the car when it was repossessed was $9,000. Free tax filing for federal and state The amount Tara realized on the repossession is $10,000. Free tax filing for federal and state That is the outstanding amount of debt immediately before the repossession, even though the FMV of the car is less than $10,000. Free tax filing for federal and state Tara figures her gain or loss on the repossession by comparing the $10,000 amount realized with her $15,000 adjusted basis. Free tax filing for federal and state Tara has a $5,000 nondeductible loss. Free tax filing for federal and state Example 2. Free tax filing for federal and state Lili paid $200,000 for her home. Free tax filing for federal and state She made a $15,000 downpayment and borrowed the remaining $185,000 from a bank. Free tax filing for federal and state She is not personally liable for the loan, but grants the bank a mortgage. Free tax filing for federal and state The bank foreclosed on the mortgage because Lili stopped making payments. Free tax filing for federal and state When the bank foreclosed on the mortgage, the balance due was $180,000, the FMV of the house was $170,000, and Lili's adjusted basis was $175,000 due to a casualty loss she had deducted. Free tax filing for federal and state The amount Lili realized on the foreclosure is $180,000, the outstanding debt immediately before the foreclosure. Free tax filing for federal and state She figures her gain or loss by comparing the $180,000 amount realized with her $175,000 adjusted basis. Free tax filing for federal and state Lili has a $5,000 realized gain. Free tax filing for federal and state See Publication 523 to figure and report any taxable amount. Free tax filing for federal and state Forms 1099-A and 1099-C. Free tax filing for federal and state    A lender who acquires an interest in your property in a foreclosure or repossession should send you Form 1099-A, Acquisition or Abandonment of Secured Property, showing information you need to figure your gain or loss. Free tax filing for federal and state However, if the lender also cancels part of your debt and must file Form 1099-C, the lender can include the information about the foreclosure or repossession on that form instead of on Form 1099-A. Free tax filing for federal and state The lender must file Form 1099-C and send you a copy if the amount of debt canceled is $600 or more and the lender is a financial institution, credit union, federal government agency, or any organization that has a significant trade or business of lending money. Free tax filing for federal and state For foreclosures or repossessions occurring in 2013, these forms should be sent to you by January 31, 2014. Free tax filing for federal and state Prev  Up  Next   Home   More Online Publications
Español

National Indian Gaming Commission

The National Indian Gaming Commission is a regulatory body that oversees some aspects of gaming on Indian lands, often complementing the work of Indian regulators.

Contact the Agency or Department

Website: National Indian Gaming Commission

E-mail:

Address: 1441 L St NW
Suite 9100

Washington, DC 20005

Phone Number: (202) 632-7003

The Free Tax Filing For Federal And State

Free tax filing for federal and state 3. Free tax filing for federal and state   Reporting Rental Income, Expenses, and Losses Table of Contents Which Forms To UseSchedule E (Form 1040) Schedule C (Form 1040), Profit or Loss From Business Qualified Joint Venture Limits on Rental LossesAt-Risk Rules Passive Activity Limits Casualties and Thefts Example Figuring the net income or loss for a residential rental activity may involve more than just listing the income and deductions on Schedule E (Form 1040). Free tax filing for federal and state There are activities which do not qualify to use Schedule E, such as when the activity is not engaged in to make a profit or when you provide substantial services in conjunction with the property. Free tax filing for federal and state There are also the limitations which may need to be applied if you have a net loss on Schedule E. Free tax filing for federal and state There are two: (1) the limitation based on the amount of investment you have at risk in your rental activity, and (2) the special limits imposed on passive activities. Free tax filing for federal and state You may also have a gain or loss related to your rental property from a casualty or theft. Free tax filing for federal and state This is considered separately from the income and expense information you report on Schedule E. Free tax filing for federal and state Which Forms To Use The basic form for reporting residential rental income and expenses is Schedule E (Form 1040). Free tax filing for federal and state However, do not use that schedule to report a not-for-profit activity. Free tax filing for federal and state See Not Rented for Profit , in chapter 4. Free tax filing for federal and state There are also other rental situations in which forms other than Schedule E would be used. Free tax filing for federal and state Schedule E (Form 1040) If you rent buildings, rooms, or apartments, and provide basic services such as heat and light, trash collection, etc. Free tax filing for federal and state , you normally report your rental income and expenses on Schedule E, Part I. Free tax filing for federal and state List your total income, expenses, and depreciation for each rental property. Free tax filing for federal and state Be sure to enter the number of fair rental and personal use days on line 2. Free tax filing for federal and state If you have more than three rental or royalty properties, complete and attach as many Schedules E as are needed to list the properties. Free tax filing for federal and state Complete lines 1 and 2 for each property. Free tax filing for federal and state However, fill in lines 23a through 26 on only one Schedule E. Free tax filing for federal and state On Schedule E, page 1, line 18, enter the depreciation you are claiming for each property. Free tax filing for federal and state To find out if you need to attach Form 4562, see Form 4562 , later. Free tax filing for federal and state If you have a loss from your rental real estate activity, you also may need to complete one or both of the following forms. Free tax filing for federal and state Form 6198, At-Risk Limitations. Free tax filing for federal and state See At-Risk Rules , later. Free tax filing for federal and state Also see Publication 925. Free tax filing for federal and state Form 8582, Passive Activity Loss Limitations. Free tax filing for federal and state See Passive Activity Limits , later. Free tax filing for federal and state Page 2 of Schedule E is used to report income or loss from partnerships, S corporations, estates, trusts, and real estate mortgage investment conduits. Free tax filing for federal and state If you need to use page 2 of Schedule E, be sure to use page 2 of the same Schedule E you used to enter your rental activity on page 1. Free tax filing for federal and state Also, include the amount from line 26 (Part I) in the “Total income or (loss)” on line 41 (Part V). Free tax filing for federal and state Form 4562. Free tax filing for federal and state   You must complete and attach Form 4562 for rental activities only if you are claiming: Depreciation, including the special depreciation allowance, on property placed in service during 2013; Depreciation on listed property (such as a car), regardless of when it was placed in service; or Any other car expenses, including the standard mileage rate or lease expenses. Free tax filing for federal and state Otherwise, figure your depreciation on your own worksheet. Free tax filing for federal and state You do not have to attach these computations to your return, but you should keep them in your records for future reference. Free tax filing for federal and state   See Publication 946 for information on preparing Form 4562. Free tax filing for federal and state Schedule C (Form 1040), Profit or Loss From Business Generally, Schedule C is used when you provide substantial services in conjunction with the property or the rental is part of a trade or business as a real estate dealer. Free tax filing for federal and state Providing substantial services. Free tax filing for federal and state   If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, you report your rental income and expenses on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Free tax filing for federal and state Use Form 1065, U. Free tax filing for federal and state S. Free tax filing for federal and state Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). Free tax filing for federal and state Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc. Free tax filing for federal and state For information, see Publication 334, Tax Guide for Small Business. Free tax filing for federal and state Also, you may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. Free tax filing for federal and state For a discussion of “substantial services,” see Real Estate Rents in Publication 334, chapter 5. Free tax filing for federal and state Qualified Joint Venture If you and your spouse each materially participate (see Material participation under Passive Activity Limits, later) as the only members of a jointly owned and operated real estate business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership. Free tax filing for federal and state This election, in most cases, will not increase the total tax owed on the joint return, but it does give each of you credit for social security earnings on which retirement benefits are based and for Medicare coverage if your rental income is subject to self-employment tax. Free tax filing for federal and state If you make this election, you must report rental real estate income on Schedule E (or Schedule C if you provide substantial services). Free tax filing for federal and state You will not be required to file Form 1065 for any year the election is in effect. Free tax filing for federal and state Rental real estate income generally is not included in net earnings from self-employment subject to self-employment tax and generally is subject to the passive activity limits. Free tax filing for federal and state If you and your spouse filed a Form 1065 for the year prior to the election, the partnership terminates at the end of the tax year immediately preceding the year the election takes effect. Free tax filing for federal and state For more information on qualified joint ventures, go to IRS. Free tax filing for federal and state gov and enter “qualified joint venture” in the search box. Free tax filing for federal and state Limits on Rental Losses If you have a loss from your rental real estate activity, two sets of rules may limit the amount of loss you can deduct. Free tax filing for federal and state You must consider these rules in the order shown below. Free tax filing for federal and state Both are discussed in this section. Free tax filing for federal and state At-risk rules. Free tax filing for federal and state These rules are applied first if there is investment in your rental real estate activity for which you are not at risk. Free tax filing for federal and state This applies only if the real property was placed in service after 1986. Free tax filing for federal and state Passive activity limits. Free tax filing for federal and state Generally, rental real estate activities are considered passive activities and losses are not deductible unless you have income from other passive activities to offset them. Free tax filing for federal and state However, there are exceptions. Free tax filing for federal and state At-Risk Rules You may be subject to the at-risk rules if you have: A loss from an activity carried on as a trade or business or for the production of income, and Amounts invested in the activity for which you are not fully at risk. Free tax filing for federal and state Losses from holding real property (other than mineral property) placed in service before 1987 are not subject to the at-risk rules. Free tax filing for federal and state In most cases, any loss from an activity subject to the at-risk rules is allowed only to the extent of the total amount you have at risk in the activity at the end of the tax year. Free tax filing for federal and state You are considered at risk in an activity to the extent of cash and the adjusted basis of other property you contributed to the activity and certain amounts borrowed for use in the activity. Free tax filing for federal and state Any loss that is disallowed because of the at-risk limits is treated as a deduction from the same activity in the next tax year. Free tax filing for federal and state See Publication 925 for a discussion of the at-risk rules. Free tax filing for federal and state Form 6198. Free tax filing for federal and state   If you are subject to the at-risk rules, file Form 6198, At-Risk Limitations, with your tax return. Free tax filing for federal and state Passive Activity Limits In most cases, all rental real estate activities (except those of certain real estate professionals, discussed later) are passive activities. Free tax filing for federal and state For this purpose, a rental activity is an activity from which you receive income mainly for the use of tangible property, rather than for services. Free tax filing for federal and state For a discussion of activities that are not considered rental activities, see Rental Activities in Publication 925. Free tax filing for federal and state Deductions or losses from passive activities are limited. Free tax filing for federal and state You generally cannot offset income, other than passive income, with losses from passive activities. Free tax filing for federal and state Nor can you offset taxes on income, other than passive income, with credits resulting from passive activities. Free tax filing for federal and state Any excess loss or credit is carried forward to the next tax year. Free tax filing for federal and state Exceptions to the rules for figuring passive activity limits for personal use of a dwelling unit and for rental real estate with active participation are discussed later. Free tax filing for federal and state For a detailed discussion of these rules, see Publication 925. Free tax filing for federal and state Real estate professionals. Free tax filing for federal and state   If you are a real estate professional, complete line 43 of Schedule E. Free tax filing for federal and state      You qualify as a real estate professional for the tax year if you meet both of the following requirements. Free tax filing for federal and state More than half of the personal services you perform in all trades or businesses during the tax year are performed in real property trades or businesses in which you materially participate. Free tax filing for federal and state You perform more than 750 hours of services during the tax year in real property trades or businesses in which you materially participate. Free tax filing for federal and state If you qualify as a real estate professional, rental real estate activities in which you materially participated are not passive activities. Free tax filing for federal and state For purposes of determining whether you materially participated in your rental real estate activities, each interest in rental real estate is a separate activity unless you elect to treat all your interests in rental real estate as one activity. Free tax filing for federal and state   Do not count personal services you perform as an employee in real property trades or businesses unless you are a 5% owner of your employer. Free tax filing for federal and state You are a 5% owner if you own (or are considered to own) more than 5% of your employer's outstanding stock, or capital or profits interest. Free tax filing for federal and state   Do not count your spouse's personal services to determine whether you met the requirements listed earlier to qualify as a real estate professional. Free tax filing for federal and state However, you can count your spouse's participation in an activity in determining if you materially participated. Free tax filing for federal and state Real property trades or businesses. Free tax filing for federal and state   A real property trade or business is a trade or business that does any of the following with real property. Free tax filing for federal and state Develops or redevelops it. Free tax filing for federal and state Constructs or reconstructs it. Free tax filing for federal and state Acquires it. Free tax filing for federal and state Converts it. Free tax filing for federal and state Rents or leases it. Free tax filing for federal and state Operates or manages it. Free tax filing for federal and state Brokers it. Free tax filing for federal and state Choice to treat all interests as one activity. Free tax filing for federal and state   If you were a real estate professional and had more than one rental real estate interest during the year, you can choose to treat all the interests as one activity. Free tax filing for federal and state You can make this choice for any year that you qualify as a real estate professional. Free tax filing for federal and state If you forgo making the choice for one year, you can still make it for a later year. Free tax filing for federal and state   If you make the choice, it is binding for the tax year you make it and for any later year that you are a real estate professional. Free tax filing for federal and state This is true even if you are not a real estate professional in any intervening year. Free tax filing for federal and state (For that year, the exception for real estate professionals will not apply in determining whether your activity is subject to the passive activity rules. Free tax filing for federal and state )   See the Instructions for Schedule E for information about making this choice. Free tax filing for federal and state Material participation. Free tax filing for federal and state   Generally, you materially participated in an activity for the tax year if you were involved in its operations on a regular, continuous, and substantial basis during the year. Free tax filing for federal and state For details, see Publication 925 or the Instructions for Schedule C. Free tax filing for federal and state Participating spouse. Free tax filing for federal and state   If you are married, determine whether you materially participated in an activity by also counting any participation in the activity by your spouse during the year. Free tax filing for federal and state Do this even if your spouse owns no interest in the activity or files a separate return for the year. Free tax filing for federal and state Form 8582. Free tax filing for federal and state    You may have to complete Form 8582 to figure the amount of any passive activity loss for the current tax year for all activities and the amount of the passive activity loss allowed on your tax return. Free tax filing for federal and state See Form 8582 not required , later in this chapter, to determine if you must complete Form 8582. Free tax filing for federal and state   If you are required to complete Form 8582 and are also subject to the at-risk rules, include the amount from Form 6198, line 21 (deductible loss) in column (b) of Form 8582, Worksheet 1 or 3, as required. Free tax filing for federal and state Exception for Personal Use of Dwelling Unit If you used the rental property as a home during the year, any income, deductions, gain, or loss allocable to such use shall not be taken into account for purposes of the passive activity loss limitation. Free tax filing for federal and state Instead, follow the rules explained in chapter 5, Personal Use of Dwelling Unit (Including Vacation Home). Free tax filing for federal and state Exception for Rental Real Estate With Active Participation If you or your spouse actively participated in a passive rental real estate activity, you may be able to deduct up to $25,000 of loss from the activity from your nonpassive income. Free tax filing for federal and state This special allowance is an exception to the general rule disallowing losses in excess of income from passive activities. Free tax filing for federal and state Similarly, you may be able to offset credits from the activity against the tax on up to $25,000 of nonpassive income after taking into account any losses allowed under this exception. Free tax filing for federal and state Example. Free tax filing for federal and state Jane is single and has $40,000 in wages, $2,000 of passive income from a limited partnership, and $3,500 of passive loss from a rental real estate activity in which she actively participated. Free tax filing for federal and state $2,000 of Jane's $3,500 loss offsets her passive income. Free tax filing for federal and state The remaining $1,500 loss can be deducted from her $40,000 wages. Free tax filing for federal and state The special allowance is not available if you were married, lived with your spouse at any time during the year, and are filing a separate return. Free tax filing for federal and state Active participation. Free tax filing for federal and state   You actively participated in a rental real estate activity if you (and your spouse) owned at least 10% of the rental property and you made management decisions or arranged for others to provide services (such as repairs) in a significant and bona fide sense. Free tax filing for federal and state Management decisions that may count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and other similar decisions. Free tax filing for federal and state Example. Free tax filing for federal and state Mike is single and had the following income and losses during the tax year:   Salary $42,300     Dividends 300     Interest 1,400     Rental loss (4,000)   The rental loss was from the rental of a house Mike owned. Free tax filing for federal and state Mike had advertised and rented the house to the current tenant himself. Free tax filing for federal and state He also collected the rents, which usually came by mail. Free tax filing for federal and state All repairs were either made or contracted out by Mike. Free tax filing for federal and state Although the rental loss is from a passive activity, because Mike actively participated in the rental property management he can use the entire $4,000 loss to offset his other income. Free tax filing for federal and state Maximum special allowance. Free tax filing for federal and state   The maximum special allowance is: $25,000 for single individuals and married individuals filing a joint return for the tax year, $12,500 for married individuals who file separate returns for the tax year and lived apart from their spouses at all times during the tax year, and $25,000 for a qualifying estate reduced by the special allowance for which the surviving spouse qualified. Free tax filing for federal and state   If your modified adjusted gross income (MAGI) is $100,000 or less ($50,000 or less if married filing separately), you can deduct your loss up to the amount specified above. Free tax filing for federal and state If your MAGI is more than $100,000 (more than $50,000 if married filing separately), your special allowance is limited to 50% of the difference between $150,000 ($75,000 if married filing separately) and your MAGI. Free tax filing for federal and state   Generally, if your MAGI is $150,000 or more ($75,000 or more if you are married filing separately), there is no special allowance. Free tax filing for federal and state Modified adjusted gross income (MAGI). Free tax filing for federal and state   This is your adjusted gross income from Form 1040, U. Free tax filing for federal and state S. Free tax filing for federal and state Individual Income Tax Return, line 38, or Form 1040NR, U. Free tax filing for federal and state S. Free tax filing for federal and state Nonresident Alien Income Tax Return, line 37, figured without taking into account: The taxable amount of social security or equivalent tier 1 railroad retirement benefits, The deductible contributions to traditional individual retirement accounts (IRAs) and section 501(c)(18) pension plans, The exclusion from income of interest from Series EE and I U. Free tax filing for federal and state S. Free tax filing for federal and state savings bonds used to pay higher educational expenses, The exclusion of amounts received under an employer's adoption assistance program, Any passive activity income or loss included on Form 8582, Any rental real estate loss allowed to real estate professionals, Any overall loss from a publicly traded partnership (see Publicly Traded Partnerships (PTPs) in the Instructions for Form 8582), The deduction allowed for one-half of self-employment tax, The deduction allowed for interest paid on student loans, The deduction for qualified tuition and related fees, and The domestic production activities deduction (see the Instructions for Form 8903). Free tax filing for federal and state Form 8582 not required. Free tax filing for federal and state   Do not complete Form 8582 if you meet all of the following conditions. Free tax filing for federal and state Your only passive activities were rental real estate activities in which you actively participated. Free tax filing for federal and state Your overall net loss from these activities is $25,000 or less ($12,500 or less if married filing separately and you lived apart from your spouse all year). Free tax filing for federal and state If married filing separately, you lived apart from your spouse all year. Free tax filing for federal and state You have no prior year unallowed losses from these (or any other passive) activities. Free tax filing for federal and state You have no current or prior year unallowed credits from passive activities. Free tax filing for federal and state Your MAGI is $100,000 or less ($50,000 or less if married filing separately and you lived apart from your spouse all year). Free tax filing for federal and state You do not hold any interest in a rental real estate activity as a limited partner or as a beneficiary of an estate or a trust. Free tax filing for federal and state   If you meet all of the conditions listed above, your rental real estate activities are not limited by the passive activity rules and you do not have to complete Form 8582. Free tax filing for federal and state On lines 23a through 23e of your Schedule E, enter the applicable amounts. Free tax filing for federal and state Casualties and Thefts As a result of a casualty or theft, you may have a loss related to your rental property. Free tax filing for federal and state You may be able to deduct the loss on your income tax return. Free tax filing for federal and state Casualty. Free tax filing for federal and state   This is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. Free tax filing for federal and state Such events include a storm, fire, or earthquake. Free tax filing for federal and state Theft. Free tax filing for federal and state   This is defined as the unlawful taking and removing of your money or property with the intent to deprive you of it. Free tax filing for federal and state Gain from casualty or theft. Free tax filing for federal and state   It is also possible to have a gain from a casualty or theft if you receive money, including insurance, that is more than your adjusted basis in the property. Free tax filing for federal and state Generally, you must report this gain. Free tax filing for federal and state However, under certain circumstances, you may defer paying tax by choosing to postpone reporting the gain. Free tax filing for federal and state To do this, you generally must buy replacement property within 2 years after the close of the first tax year in which any part of your gain is realized. Free tax filing for federal and state In certain circumstances, the replacement period can be greater than 2 years; see Replacement Period in Publication 547 for more information. Free tax filing for federal and state The cost of the replacement property must be equal to or more than the net insurance or other payment you received. Free tax filing for federal and state More information. Free tax filing for federal and state   For information on business and nonbusiness casualty and theft losses, see Publication 547. Free tax filing for federal and state How to report. Free tax filing for federal and state    If you had a casualty or theft that involved property used in your rental activity, figure the net gain or loss in Section B of Form 4684, Casualties and Thefts. Free tax filing for federal and state Follow the Instructions for Form 4684 for where to carry your net gain or loss. Free tax filing for federal and state Example In February 2008, Marie Pfister bought a rental house for $135,000 (house $120,000 and land $15,000) and immediately began renting it out. Free tax filing for federal and state In 2013, she rented it all 12 months for a monthly rental fee of $1,125. Free tax filing for federal and state In addition to her rental income of $13,500 (12 x $1,125), Marie had the following expenses. Free tax filing for federal and state Mortgage interest $8,000 Fire insurance (1-year policy) 250 Miscellaneous repairs 400 Real estate taxes imposed and paid 500 Maintenance 200 Marie depreciates the residential rental property under MACRS GDS. Free tax filing for federal and state This means using the straight line method over a recovery period of 27. Free tax filing for federal and state 5 years. Free tax filing for federal and state She uses Table 2-2d to find her depreciation percentage. Free tax filing for federal and state Because she placed the property in service in February 2008, she continues to use that row of Table 2-2d. Free tax filing for federal and state For year 6, the rate is 3. Free tax filing for federal and state 636%. Free tax filing for federal and state Marie figures her net rental income or loss for the house as follows: Total rental income received  ($1,125 × 12) $13,500 Minus: Expenses     Mortgage interest $8,000   Fire insurance 250   Miscellaneous repairs 400   Real estate taxes 500   Maintenance 200   Total expenses 9,350 Balance $4,150 Minus: Depreciation ($120,000 x 3. Free tax filing for federal and state 636%) 4,363 Net rental (loss) for house ($213)       Marie had a net loss for the year. Free tax filing for federal and state Because she actively participated in her passive rental real estate activity and her loss was less than $25,000, she can deduct the loss on her return. Free tax filing for federal and state Marie also meets all of the requirements for not having to file Form 8582. Free tax filing for federal and state She uses Schedule E, Part I, to report her rental income and expenses. Free tax filing for federal and state She enters her income, expenses, and depreciation for the house in the column for Property A and enters her loss on line 22. Free tax filing for federal and state Form 4562 is not required. Free tax filing for federal and state Prev  Up  Next   Home   More Online Publications