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1040 Income Tax Forms

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1040 Income Tax Forms

1040 income tax forms 31. 1040 income tax forms   Impuesto sobre Ingresos No Derivados del Trabajo de Determinados Hijos Table of Contents ¿Que Hay de Nuevo? Introduction Useful Items - You may want to see: Cómo Saber si se Tiene que Utilizar la Declaración del Padre o de la MadrePadres que no Presentan la Declaración Conjunta Elección de los Padres de Declarar los Intereses y Dividendos del HijoConsecuencias de Incluir los Ingresos del Hijo Cómo Calcular los Ingresos del Hijo Cómo Calcular el Impuesto Adicional Impuesto para Determinados Hijos con Ingresos No Derivados del TrabajoCómo Facilitar Información sobre los Padres (líneas A-C del Formulario 8615) Paso 1. 1040 income tax forms Cómo Calcular los Ingresos Netos No Derivados del Trabajo del Hijo (Parte I del Formulario 8615) Paso 2. 1040 income tax forms Cómo Calcular el Impuesto Provisional a la Tasa Impositiva de los Padres (Parte II del Formulario 8615) Paso 3. 1040 income tax forms Cómo Calcular el Impuesto del Hijo (Parte III del Formulario 8615) ¿Que Hay de Nuevo? Impuesto sobre el ingreso neto de inversiones. 1040 income tax forms  Para años empezando después del 31 de diciembre de 2012, el impuesto de un hijo, el cual se calcula en el Formulario 8615, puede estar sujeto al impuesto sobre el ingreso neto de inversiones (NIIT, por sus siglas en inglés). 1040 income tax forms El NIIT es un impuesto de 3. 1040 income tax forms 8% sobre la cantidad menor entre el ingreso neto de inversión o el exceso del ingreso bruto ajustado modificado (MAGI) del hijo que exceda del límite superior específico. 1040 income tax forms Utilice el Formulario 8960, Net Investment Income Tax (Impuesto sobre ingreso neto de inversiones), en inglés, para calcular este impuesto. 1040 income tax forms Para más información sobre el NIIT, visite www. 1040 income tax forms irs. 1040 income tax forms gov e ingrese “Net Investment Income Tax” en la casilla de búsqueda “Search” (Buscar), en inglés. 1040 income tax forms Introduction Este capítulo explica los dos requisitos siguientes, los cuales podrían afectar el impuesto sobre ingresos no derivados del trabajo de determinados hijos: Si los ingresos procedentes de intereses y dividendos del hijo (incluidas las distribuciones de ganancias de capital) totalizan menos de $10,000, el padre o la madre tal vez pueda optar por incluir dichos ingresos en la declaración de uno de los padres en vez de presentar una declaración a nombre del hijo. 1040 income tax forms Vea Elección de los Padres de Declarar Intereses y Dividendos del Hijo , más adelante. 1040 income tax forms Si el total de intereses, dividendos y otros ingresos no derivados del trabajo del hijo sobrepasa $2,000, una parte de dichos ingresos podría estar sujeta a la misma tasa de impuesto que la de sus padres en lugar de estar sujeta a la tasa del hijo. 1040 income tax forms (Vea Impuesto para Determinados Hijos con Ingresos No Derivados del Trabajo , más adelante). 1040 income tax forms En lo que concierne a estos requisitos, el término “hijo” abarca a hijos legalmente adoptados e hijastros. 1040 income tax forms Estos requisitos corresponden tanto si el hijo es dependiente como si no lo es. 1040 income tax forms Useful Items - You may want to see: Publicación 929 Tax Rules for Children and Dependents (Requisitos tributarios para hijos y dependientes), en inglés Formulario (e Instrucciones) 8615 Tax for Certain Children Who Have Unearned Income (Impuesto para determinados hijos con ingresos no derivados del trabajo), en inglés 8814 Parents' Election To Report Child's Interest and Dividends (Elección de los padres de declarar los intereses y dividendos del hijo), en inglés Cómo Saber si se Tiene que Utilizar la Declaración del Padre o de la Madre Si los padres del hijo están casados el uno con el otro y presentan una declaración conjunta, básese en la declaración conjunta para calcular el impuesto sobre los ingresos no derivados del trabajo de dicho hijo. 1040 income tax forms La tasa impositiva y otra información de dicha declaración se utiliza para calcular el impuesto del hijo según se explica más adelante bajo Impuesto para Determinados Hijos con Ingresos No Derivados del Trabajo . 1040 income tax forms Padres que no Presentan la Declaración Conjunta Para los padres que no presenten la declaración conjunta, los siguientes temas aclaran, cuál declaración de impuestos de los padres tiene que utilizar para calcular el impuesto. 1040 income tax forms Sólo el padre o la madre cuya declaración se utilice puede elegir la opción descrita bajo Elección de los Padres de Declarar Intereses y Dividendos del Hijo . 1040 income tax forms Padres casados. 1040 income tax forms   Si los padres del hijo presentan declaraciones por separado, utilice la declaración de quien tenga el mayor ingreso tributable. 1040 income tax forms Padres que no viven juntos. 1040 income tax forms   Si los padres del hijo están casados el uno con el otro pero no viven juntos, y el padre o la madre con quien vive el hijo (el padre o la madre con custodia) se considera no casado, utilice la declaración del padre o de la madre con custodia. 1040 income tax forms Si el padre o la madre con custodia no es considerado no casado, utilice la declaración de quien tenga el mayor ingreso tributable. 1040 income tax forms   Para una explicación sobre cuándo una persona casada que vive aparte de su cónyuge es considerada no casada, vea Cabeza de Familia en el capítulo 2. 1040 income tax forms Padres divorciados. 1040 income tax forms   Si los padres del hijo están divorciados o legalmente separados y el padre o la madre que tuvo la custodia del hijo durante la mayor parte del año (el padre o la madre con custodia) no se ha vuelto a casar, utilice la declaración del padre o de la madre con custodia. 1040 income tax forms Padre o madre con custodia que se ha vuelto a casar. 1040 income tax forms   Si el padre o la madre con custodia ha vuelto a casarse, el padrastro o la madrastra (en vez del padre o la madre sin custodia) se considera el otro padre o la otra madre del hijo. 1040 income tax forms Por lo tanto, si el padre o la madre con custodia y el padrastro o la madrastra presentan una declaración conjunta, utilice dicha declaración conjunta. 1040 income tax forms No utilice la declaración del padre o de la madre sin custodia. 1040 income tax forms   Si el padre o la madre con custodia está casado con el padrastro o la madrastra pero presentan declaraciones por separado, utilice la declaración de quien tenga el mayor ingreso tributable. 1040 income tax forms Si el padre o la madre con custodia está casado con el padrastro o la madrastra pero no viven juntos, corresponde el tema anterior Padres que no viven juntos . 1040 income tax forms Padres que nunca se han casado. 1040 income tax forms   Si los padres del hijo nunca han estado casados el uno con el otro pero vivieron juntos durante todo el año, utilice la declaración de quien tenga el mayor ingreso tributable. 1040 income tax forms Si los padres no vivieron juntos durante todo el año, corresponden los requisitos explicados anteriormente bajo Padres divorciados . 1040 income tax forms Padre viudo o madre viuda que se vuelve a casar. 1040 income tax forms   Si un viudo o una viuda vuelve a casarse, el nuevo cónyuge se considera el otro padre o la otra madre del hijo. 1040 income tax forms En este caso, corresponden los requisitos explicados anteriormente bajo Padre o madre con custodia que se ha vuelto a casar . 1040 income tax forms Elección de los Padres de Declarar los Intereses y Dividendos del Hijo Tal vez pueda optar por incluir los ingresos de su hijo procedentes de intereses y dividendos (incluidas las distribuciones de ganancias de capital) en la declaración de impuestos. 1040 income tax forms En tal caso, su hijo no estará obligado a presentar una declaración. 1040 income tax forms Puede elegir esta opción sólo si se cumplen todas las condiciones siguientes: Su hijo tenía menos de 19 años de edad (o tenía menos de 24 años si era estudiante a tiempo completo) al finalizar el año. 1040 income tax forms Su hijo recibió ingresos sólo de intereses y dividendos (incluidas las distribuciones de ganancias de capital y dividendos del Alaska Permanent Fund (Fondo Permanente de Alaska)). 1040 income tax forms Los ingresos brutos del hijo eran menos de $10,000. 1040 income tax forms El hijo está obligado a presentar la declaración a no ser que usted elija incluir estos ingresos. 1040 income tax forms El hijo no presenta una declaración conjunta correspondiente al año actual. 1040 income tax forms No se efectuó ningún pago de impuestos estimados para el año ni se aplicó a este año ningún pago del año anterior (ni de una declaración enmendada) en exceso bajo el nombre y número de Seguro Social de su hijo. 1040 income tax forms No se retuvo de los ingresos de su hijo ningún impuesto federal sobre los ingresos conforme a las reglas de la retención adicional. 1040 income tax forms Usted es el padre o la madre cuya declaración se tiene que utilizar al aplicar los requisitos tributarios especiales para hijos. 1040 income tax forms (Vea Cómo Saber si se Tiene que Utilizar la Declaración del Padre o de la Madre , anteriormente). 1040 income tax forms Estas condiciones se hallan también en la Figura 31-A. 1040 income tax forms Determinados cumpleaños el 1 de enero. 1040 income tax forms   Un hijo que haya nacido el 1 de enero de 1995 se considerará de 19 años de edad al final del año 2013. 1040 income tax forms Usted no puede optar por declarar los intereses y dividendos de tal hijo a menos que éste fuera estudiante a tiempo completo. 1040 income tax forms   Aquel hijo que haya nacido el 1 de enero de 1990 se considerará de 24 años de edad al final del año 2013. 1040 income tax forms Usted no puede optar por declarar los intereses y dividendos de tal hijo. 1040 income tax forms Estudiante a tiempo completo. 1040 income tax forms   Un estudiante a tiempo completo es un hijo matriculado como tal durante alguna parte de cada uno de 5 meses del año calendario en una escuela o que asistió a tiempo completo a un curso de capacitación agrícola ofrecido sobre el terreno por una escuela, agencia del estado, condado o gobierno local. 1040 income tax forms El término “escuela” abarca escuelas politécnicas, profesionales e industriales. 1040 income tax forms Una escuela no incluye un curso de capacitación en el trabajo, escuela por correspondencia, ni escuelas que ofrecen cursos sólo por Internet. 1040 income tax forms Cómo optar por incluir los ingresos de su hijo. 1040 income tax forms   Elija incluir los ingresos de su hijo adjuntando el Formulario 8814 al Formulario 1040. 1040 income tax forms (Si opta por hacer esto, no puede presentar el Formulario 1040A ni el Formulario 1040EZ). 1040 income tax forms Adjunte un Formulario 8814 distinto correspondiente a cada hijo cuyos ingresos desee incluir. 1040 income tax forms Puede incluir los ingresos de uno o más hijos y no incluir los ingresos de otros. 1040 income tax forms Consecuencias de Incluir los Ingresos del Hijo El impuesto federal sobre los ingresos de su hijo podría ser mayor si opta por usar el Formulario 8814. 1040 income tax forms La tasa impositiva podría ser más alta. 1040 income tax forms   Si su hijo recibió dividendos calificados o distribuciones de ganancias de capital, usted podría pagar hasta $100 adicionales de impuestos si incluye los ingresos de su hijo en vez de presentar una declaración de impuestos por separado a nombre del hijo. 1040 income tax forms Esto se debe a que la tasa impositiva que corresponde a los ingresos de su hijo entre $1,000 y $2,000 es de 10% si usted opta por incluirlos. 1040 income tax forms No obstante, si presenta una declaración por separado en nombre del hijo, la tasa impositiva podría bajar hasta 0% (porcentaje de cero) debido a las tasas impositivas preferentes para dividendos calificados y distribuciones de ganancias de capital. 1040 income tax forms Deducciones que no puede tomar. 1040 income tax forms   Al hacer la elección de incluir estos ingresos en el Formulario 8814, no puede tomar ninguna de las deducciones siguientes a la que el hijo tendría derecho en su propia declaración. 1040 income tax forms La deducción estándar adicional si el hijo es ciego. 1040 income tax forms La deducción por una multa por el retiro prematuro de los ahorros de su hijo. 1040 income tax forms Deducciones detalladas (como gastos de inversiones de su hijo o donaciones caritativas). 1040 income tax forms Deducciones o créditos reducidos. 1040 income tax forms   Si utiliza el Formulario 8814, su ingreso bruto ajustado aumentado podría reducir determinados créditos o deducciones en la declaración, incluyendo lo siguiente: Deducciones por aportaciones a una cuenta de ahorros tradicional para la jubilación (IRA, por sus siglas en inglés). 1040 income tax forms Deducciones por intereses sobre un préstamo de estudios. 1040 income tax forms Deducciones detalladas por gastos médicos, pérdidas por hecho fortuito y robo y ciertos gastos misceláneos. 1040 income tax forms Crédito por gastos del cuidado de hijos y dependientes. 1040 income tax forms Crédito tributario por hijos. 1040 income tax forms Créditos tributarios por estudios. 1040 income tax forms Crédito por ingreso del trabajo. 1040 income tax forms Figura 31-A. 1040 income tax forms ¿Puede Incluir Usted en su Declaración de Impuestos los Ingresos de su Hijo? Please click here for the text description of the image. 1040 income tax forms Figura 31–A. 1040 income tax forms ¿Puede Incluir Usted en su Declaración de Impuestos los Ingresos de su Hijo? Multa por pago insuficiente del impuesto estimado. 1040 income tax forms   Si elige incluir estos ingresos para 2013 y no se le retuvo impuesto suficiente o no pagó suficiente impuesto estimado para saldar los impuestos adeudados, podría estar sujeto a una multa. 1040 income tax forms Si piensa elegir lo mismo para 2014, es posible que necesite aumentar la retención de impuestos federales sobre el ingreso o los pagos de impuesto estimado para evitar la multa. 1040 income tax forms Vea el capítulo 4 para más información. 1040 income tax forms Cómo Calcular los Ingresos del Hijo Utilice la Parte I del Formulario 8814 para calcular los ingresos de su hijo procedentes de intereses y dividendos declarados por usted. 1040 income tax forms A sus ingresos sólo se le añade la cantidad que sea superior a $2,000. 1040 income tax forms La cantidad superior a $2,000 se indica en la línea 6 del Formulario 8814. 1040 income tax forms A menos que los ingresos del hijo abarquen dividendos calificados o distribuciones de ganancias de capital (explicadas a continuación), la misma cantidad se indica en la línea 12 del Formulario 8814. 1040 income tax forms Incluya la cantidad de la línea 12 del Formulario 8814 en la línea 21 del Formulario 1040. 1040 income tax forms Anote en inglés “Form 8814” en la línea de puntos al lado de la línea 21. 1040 income tax forms Si presenta más de un Formulario 8814, incluya el total de los montos de la línea 12 de todos los Formularios 8814 en la línea 21 del Formulario 1040. 1040 income tax forms Distribuciones de ganancias de capital y dividendos calificados. 1040 income tax forms   Si se incluye alguna distribución de ganancias de capital en los ingresos de dividendos de su hijo, vea Capital gain distributions (Distribuciones de ganancias de capital) bajo Figuring Child's Income (Cómo calcular los ingresos del hijo) en la Parte 2 de la Publicación 929, en inglés. 1040 income tax forms Si se incluye algún dividendo calificado en los ingresos de dividendos de su hijo, vea Qualified dividends (Dividendos calificados) bajo Figuring Child's Income (Cómo calcular los ingresos del hijo) en la Parte 2 de la Publicación 929, en inglés. 1040 income tax forms Cómo Calcular el Impuesto Adicional Utilice la Parte II del Formulario 8814 para calcular el impuesto sobre los $2,000 de los intereses y dividendos de su hijo que no incluya usted en sus ingresos. 1040 income tax forms Este impuesto se suma al impuesto calculado sobre los ingresos suyos. 1040 income tax forms Dicho impuesto adicional es la cantidad que sea menor entre: El 10% (multiplicado por la cantidad de los ingresos brutos de su hijo menos $1,000) o $100. 1040 income tax forms Incluya el monto de la línea 15 de todos los Formularios 8814 en el total de la línea 44 del Formulario 1040. 1040 income tax forms Marque el recuadro a de la línea 44 del Formulario 1040. 1040 income tax forms Figura 31-B. 1040 income tax forms ¿Tiene que Utilizar el Formulario 8615 para Calcular los Impuestos de su Hijo? Please click here for the text description of the image. 1040 income tax forms Figura 31-B. 1040 income tax forms ¿Tiene que Utilizar el Formulario 8615 para Calcular los Impuestos de su Hijo? Impuesto para Determinados Hijos con Ingresos No Derivados del Trabajo Si el total de intereses, dividendos y otros ingresos no derivados del trabajo de un hijo sobrepasa $2,000, una parte de dichos ingresos podría estar sujeta a la misma tasa impositiva que la de sus padres en lugar de estar sujeta a la tasa del hijo. 1040 income tax forms Si el padre o la madre no elige, o no puede elegir, incluir los ingresos del hijo en su declaración, utilice el Formulario 8615 para calcular los impuestos del hijo. 1040 income tax forms Adjunte el formulario completado al Formulario 1040 o al Formulario 1040A del hijo. 1040 income tax forms Cuándo se tiene que presentar el Formulario 8615. 1040 income tax forms   El Formulario 8615 tiene que presentarse para un hijo si se dan todas las siguientes condiciones: Los ingresos del hijo no derivados del trabajo eran superiores a $2,000. 1040 income tax forms El hijo está obligado a presentar una declaración para 2013. 1040 income tax forms Dicho hijo: Era menor de 18 años de edad al final del año, Tenía 18 años a finales del año y su ingreso del trabajo no constituía más de la mitad de su manutención o Era estudiante a tiempo completo mayor de 18 años y menor de 24 años al finalizar el año y su ingreso del trabajo no constituía más de la mitad de la manutención suya. 1040 income tax forms Por lo menos uno de los padres del hijo estaba vivo al finalizar el año 2013. 1040 income tax forms El hijo no presenta una declaración conjunta para 2013. 1040 income tax forms Estas condiciones se hallan también en la Figura 31-B. 1040 income tax forms Ingreso del trabajo. 1040 income tax forms   El ingreso del trabajo incluye sueldos, salarios, propinas y otras remuneraciones recibidas por servicios personales que usted prestó. 1040 income tax forms No incluye los ingresos no derivados del trabajo según se define más adelante en este capítulo. 1040 income tax forms Manutención. 1040 income tax forms   La manutención de su hijo incluye todas las cantidades gastadas para proveerle alimentos, alojamiento, ropa, educación, cuidado médico y dental, recreación, transporte y necesidades similares. 1040 income tax forms Al calcular la manutención de su hijo, incluya aquélla proporcionada por usted, su hijo y otras personas. 1040 income tax forms Sin embargo, no se considera como manutención una beca que su hijo haya recibido si éste es estudiante a tiempo completo. 1040 income tax forms Vea el capítulo 3 para más detalles acerca de la manutención. 1040 income tax forms Determinados cumpleaños el 1 de enero. 1040 income tax forms   Utilice la siguiente tabla para saber si determinados hijos con cumpleaños en el 1 de enero cumplen la condición 3 bajo Cuándo se tiene que presentar el Formulario 8615. 1040 income tax forms    SI un hijo nació. 1040 income tax forms . 1040 income tax forms . 1040 income tax forms ENTONCES, al finalizar 2013, se considera que el hijo tiene. 1040 income tax forms . 1040 income tax forms . 1040 income tax forms el 1 de enero de 1996 18 años* el 1 de enero de 1995 19 años** el 1 de enero de 1990 24 años*** *Este hijo no es menor de 18 años. 1040 income tax forms El hijo cumple la condición 3 sólo si éste no tuvo ingresos derivados del trabajo superiores a más de la mitad de la manutención suya. 1040 income tax forms  **El hijo cumple la condición 3 sólo si éste era estudiante a tiempo completo y no tuvo ingresos derivados del trabajo superiores a más de la mitad de la manutención suya. 1040 income tax forms  ***No utilice el Formulario 8615 para este hijo. 1040 income tax forms Cómo Facilitar Información sobre los Padres (líneas A-C del Formulario 8615) En las líneas A y B del Formulario 8615, escriba el nombre y número de Seguro Social de los padres. 1040 income tax forms (Si los padres presentaron una declaración conjunta, escriba el nombre y número de Seguro Social que aparezca primero en la declaración conjunta). 1040 income tax forms En la línea C, marque el recuadro correspondiente al estado civil para efectos de la declaración del padre o de la madre. 1040 income tax forms Vea Cómo Saber si se Tiene que Utilizar la Declaración del Padre o de la Madre al principio de este capítulo para información sobre qué información de la declaración de los padres tiene que utilizar para llenar el Formulario 8615. 1040 income tax forms Padre o madre con año tributario distinto. 1040 income tax forms   Si el padre o la madre y el hijo no tienen el mismo año tributario, complete el Formulario 8615 utilizando la información de la declaración del padre o de la madre para el año tributario que finalice durante el año tributario del hijo. 1040 income tax forms Si no se obtiene a tiempo la información de la declaración del padre o de la madre. 1040 income tax forms   Si la información necesaria de la declaración de los padres no se obtiene para la fecha de vencimiento del plazo de entrega de la declaración del hijo (normalmente el 15 de abril), puede utilizar cálculos aproximados para presentar la declaración. 1040 income tax forms   Puede utilizar cualquier cálculo aproximado razonable. 1040 income tax forms Dicho cálculo puede derivarse de información de la declaración del año anterior. 1040 income tax forms Si utiliza un cálculo aproximado en el Formulario 8615, anote en inglés, “Estimated” (Aproximado) en la línea junto a dicha cantidad. 1040 income tax forms    Cuando obtenga la información correcta, presente una declaración enmendada utilizando el Formulario 1040X, Amended U. 1040 income tax forms S. 1040 income tax forms Individual Income Tax Return (Declaración enmendada de impuestos sobre el ingreso personal de los Estados Unidos), en inglés. 1040 income tax forms   En vez de utilizar cálculos aproximados, quizás pueda conseguir una prórroga automática de 6 meses para presentar la declaración de impuestos si para la fecha de vencimiento del plazo de entrega de la misma, presenta el Formulario 4868(SP), Solicitud de Prórroga Automática para Presentar la Declaración del Impuesto sobre el Ingreso Personal de los Estados Unidos (o el Formulario 4868, en inglés). 1040 income tax forms Las prórrogas se explican en el capítulo 1 . 1040 income tax forms Paso 1. 1040 income tax forms Cómo Calcular los Ingresos Netos No Derivados del Trabajo del Hijo (Parte I del Formulario 8615) Al calcular el impuesto de un hijo utilizando el Formulario 8615, el primer paso es calcular los ingresos netos no derivados del trabajo del hijo. 1040 income tax forms Para hacerlo, utilice la Parte I del Formulario 8615. 1040 income tax forms Línea 1 (ingresos no derivados del trabajo). 1040 income tax forms   Si el hijo no recibió ingresos del trabajo, anote en esta línea los ingresos brutos ajustados indicados en la declaración del hijo. 1040 income tax forms Los ingresos brutos ajustados aparecen en la línea 38 del Formulario 1040 o en la línea 22 del Formulario 1040A. 1040 income tax forms No se puede utilizar el Formulario 1040EZ si se tiene que presentar el Formulario 8615. 1040 income tax forms   Si el hijo sí recibió ingresos del trabajo, calcule la cantidad a anotar en la línea 1 del Formulario 8615 utilizando la hoja de trabajo de las instrucciones del formulario. 1040 income tax forms   No obstante, si el hijo: ha excluido de la declaración algunos ingresos ganados en el extranjero, ha deducido alguna pérdida del trabajo por cuenta propia o ha deducido alguna pérdida neta de operación de otro año, utilice la Alternate Worksheet (Hoja de trabajo alternativa) para la línea 1 del Formulario 8615 que se encuentra en la Publicación 929, en inglés, para calcular la cantidad a anotar en la línea 1 del Formulario 8615. 1040 income tax forms Definición de los ingresos no derivados del trabajo. 1040 income tax forms   Los ingresos no derivados del trabajo generalmente son todos los ingresos que no sean sueldos, salarios ni otras cantidades recibidas como pago por trabajo que de hecho se haya realizado. 1040 income tax forms Dichos ingresos abarcan los intereses tributables, dividendos (inclusive las distribuciones de ganancias de capital), ganancias de capital, compensación por desempleo, la parte sujeta a impuestos de pagos del Seguro Social y pensiones y determinadas distribuciones de fideicomisos. 1040 income tax forms Además, los ingresos no derivados del trabajo abarcan cantidades derivadas de bienes que el hijo haya adquirido con ingresos del trabajo (como intereses sobre una cuenta de ahorros en la que el hijo haya depositado sueldos). 1040 income tax forms Ingresos no sujetos a impuestos. 1040 income tax forms   Para este fin, los ingresos no derivados del trabajo sólo abarcan cantidades que su hijo tenga que incluir en el total de ingresos. 1040 income tax forms No se incluyen los ingresos no tributables no derivados del trabajo, tales como los intereses exentos de impuestos y la parte no tributable de pagos del Seguro Social y pensiones. 1040 income tax forms Ingresos procedentes de bienes recibidos como regalo. 1040 income tax forms   Los ingresos no derivados del trabajo de un hijo abarcan todo ingreso generado por bienes que pertenezcan al hijo. 1040 income tax forms Esto es así aun si se le traspasaron los bienes al hijo, independientemente de cuándo se traspasaron o se compraron dichos bienes ni quién los traspasó. 1040 income tax forms   Los ingresos no derivados del trabajo de un hijo incluyen ingresos generados por bienes dados al hijo como regalo. 1040 income tax forms Esto incluye regalos dados al hijo por los abuelos o cualquier otra persona y regalos dados conforme a la Uniform Gift to Minors Act (Ley de Uniformidad Respecto a Regalos a Menores). 1040 income tax forms Ejemplo. 1040 income tax forms Amanda Naranjo, de 13 años de edad, recibió los siguientes ingresos: Dividendos — $800 Salarios — $2,100 Intereses tributables — $1,200 Intereses exentos de impuestos — $100 Ganancias netas de capital — $100 Los dividendos eran dividendos calificados sobre acciones que le habían regalado sus abuelos. 1040 income tax forms Los ingresos no derivados del trabajo de Amanda son $2,100. 1040 income tax forms Éste es el total de dividendos ($800), intereses tributables ($1,200) y ganancias netas de capital ($100). 1040 income tax forms Su salario se considera ingreso del trabajo, y no de ingreso no derivado del trabajo porque se le paga por un trabajo que de hecho se ha realizado. 1040 income tax forms No se incluyen los intereses exentos de impuestos porque éstos no están sujetos a impuestos. 1040 income tax forms Ingresos provenientes de fideicomisos. 1040 income tax forms   Si el hijo es beneficiario de un fideicomiso, las distribuciones de intereses, dividendos, ganancias de capital y otros ingresos no derivados del trabajo tributables procedentes de dicho fideicomiso se consideran ingresos no derivados del trabajo del hijo. 1040 income tax forms   No obstante, para llenar el Formulario 8615, una distribución tributable de un fideicomiso calificado establecido para casos de incapacidad no se considera ingresos no derivados del trabajo sino ingresos del trabajo. 1040 income tax forms Línea 2 (deducciones). 1040 income tax forms   Si el hijo no detalla las deducciones en el Anexo A del Formulario 1040, anote $2,000 en la línea 2. 1040 income tax forms   Si el hijo sí detalla las deducciones, anote en la línea 2 la cantidad mayor entre: $1,000 más la parte de las deducciones detalladas del hijo de la línea 29 del Anexo A del Formulario 1040 que esté directamente relacionada con la generación de ingresos no derivados del trabajo anotados en la línea 1 o $2,000. 1040 income tax forms Relación directa entre las deducciones y la generación de ingresos no derivados del trabajo. 1040 income tax forms   Se considera que las deducciones detalladas están directamente relacionadas con la generación de ingresos no derivados del trabajo si las mismas corresponden a gastos pagados para generar o cobrar ingresos sujetos a impuestos o para administrar, conservar o mantener bienes cuyo fin es generar ingresos. 1040 income tax forms Esos gastos abarcan cargos por custodia y servicios, cargos por servicios de cobro de intereses y dividendos tributables y determinados cargos por asesoramiento sobre inversiones. 1040 income tax forms   Estos gastos se suman a otras deducciones detalladas misceláneas en el Anexo A (Formulario 1040). 1040 income tax forms Sólo se puede deducir la cantidad que sea superior al 2% de los ingresos brutos ajustados del hijo. 1040 income tax forms Vea el capítulo 28 para más información. 1040 income tax forms Ejemplo 1. 1040 income tax forms Roberto, de 12 años de edad, tiene ingresos no derivados del trabajo de $8,000, sin otros ingresos ni ajustes a los ingresos. 1040 income tax forms Tiene deducciones detalladas de $300 (netas del límite del 2%) que están directamente relacionadas con sus ingresos no derivados del trabajo. 1040 income tax forms Tiene ingresos brutos ajustados de $8,000 que se anotan en la línea 38 del Formulario 1040 y en la línea 1 del Formulario 8615. 1040 income tax forms En la línea 2 se anotan $2,000 porque dicha cantidad supera la suma de $1,000 más las deducciones detalladas de $300 directamente relacionadas con la generación de ingresos de inversiones. 1040 income tax forms Ejemplo 2. 1040 income tax forms Elena, de 8 años de edad, tiene ingresos no derivados del trabajo de $16,000 y tiene una multa de $100 por retiro prematuro. 1040 income tax forms No tiene otros ingresos. 1040 income tax forms Tiene deducciones detalladas de $1,050 (netas del límite del 2%) que están directamente relacionadas con la generación de sus ingresos no derivados del trabajo. 1040 income tax forms Sus ingresos brutos ajustados, anotados en la línea 1, son $15,900 ($16,000 − $100). 1040 income tax forms La cantidad de la línea 2 es $2,050. 1040 income tax forms Ésta es la cantidad mayor de: $1,000 más los $1,050 de deducciones detalladas directamente relacionadas con la generación de ingresos de inversiones o $2,000. 1040 income tax forms Línea 3. 1040 income tax forms   De la línea 1 reste la línea 2 y anote el resultado en esta línea. 1040 income tax forms Si es cero o menos, no llene el resto del formulario. 1040 income tax forms No obstante, tiene que adjuntar el Formulario 8615 a la declaración del hijo. 1040 income tax forms Calcule el impuesto sobre los ingresos tributables del hijo de manera normal. 1040 income tax forms Línea 4 (ingresos tributables del hijo). 1040 income tax forms   Anote en la línea 4 los ingresos tributables del hijo provenientes de la línea 43 del Formulario 1040 o de la línea 27 del Formulario 1040A. 1040 income tax forms   Sin embargo, si el hijo presenta el Formulario 2555 o el Formulario 2555-EZ para declarar la exclusión de ingresos ganados en el extranjero, la exclusión por concepto de vivienda o la deducción por concepto de vivienda, vea las Instrucciones del Formulario 8615 o la Publicación 929, ambas en inglés. 1040 income tax forms Línea 5 (ingresos netos no derivados del trabajo). 1040 income tax forms   Los ingresos netos no derivados del trabajo del hijo no pueden sobrepasar sus ingresos tributables. 1040 income tax forms Anote en la línea 5 del Formulario 8615 la cantidad de la línea 3 o la línea 4, la que sea menor. 1040 income tax forms Esta cantidad corresponde a los ingresos netos no derivados del trabajo del hijo. 1040 income tax forms   Si es cero o menos, no llene el resto del formulario. 1040 income tax forms No obstante, tiene que adjuntar el Formulario 8615 a la declaración del hijo. 1040 income tax forms Calcule el impuesto sobre los ingresos tributables del hijo de manera normal. 1040 income tax forms Paso 2. 1040 income tax forms Cómo Calcular el Impuesto Provisional a la Tasa Impositiva de los Padres (Parte II del Formulario 8615) El siguiente paso al llenar el Formulario 8615 es calcular un impuesto provisional sobre los ingresos netos no derivados del trabajo del hijo utilizando la tasa impositiva del padre o de la madre. 1040 income tax forms El impuesto provisional a la tasa impositiva del padre o de la madre es la diferencia entre el impuesto sobre los ingresos tributables del padre o de la madre calculados con los ingresos netos no derivados del trabajo del hijo (más los ingresos netos no derivados del trabajo de cualquier otro hijo cuyo Formulario 8615 incluya la información de la declaración de impuestos del padre o de la madre) y el impuesto calculado sin dichos ingresos. 1040 income tax forms Al calcular el impuesto provisional a la tasa impositiva del padre o de la madre en el Formulario 8615, no vuelva a calcular las exclusiones, deducciones ni créditos en la declaración del padre o de la madre debido a los ingresos netos no derivados del trabajo del hijo. 1040 income tax forms Por ejemplo, no vuelva a calcular la deducción por gastos médicos. 1040 income tax forms Calcule el impuesto provisional en las líneas 6 a 13 del Formulario 8615. 1040 income tax forms Nota: Si el hijo o el padre o la madre tiene pérdidas o ganancias de capital, obtenga la Publicación 929, en inglés, para información que le será de ayuda al completar la Parte II del Formulario 8615. 1040 income tax forms Línea 6 (ingresos tributables del padre o de la madre). 1040 income tax forms   Anote en la línea 6 los ingresos tributables del padre o de la madre provenientes de la línea 43 del Formulario 1040, de la línea 27 del Formulario 1040A o la línea 6 del Formulario 1040EZ. 1040 income tax forms   Si utilizó la Foreign Earned Income Tax Worksheet (Hoja de trabajo para el impuesto sobre los ingresos del trabajo en el extranjero) de las instrucciones del Formulario 1040 para calcular el impuesto correspondiente al padre o a la madre, anote la cantidad de la línea 3 de dicha hoja de trabajo en vez de los ingresos tributables del padre o de la madre. 1040 income tax forms Línea 7 (ingresos netos no derivados del trabajo de otros hijos). 1040 income tax forms   Si la información de la declaración del padre o de la madre se utiliza también en el Formulario 8615 de otro hijo, anote en la línea 7 el total de las cantidades de la línea 5 de los Formularios 8615 de todos los demás hijos. 1040 income tax forms No incluya la cantidad de la línea 5 del Formulario 8615 que esté llenando. 1040 income tax forms Ejemplo. 1040 income tax forms Pablo y Juana del Pozo tienen tres hijos, Sandra, Geraldo y Miguel, quienes tienen que adjuntar el Formulario 8615 a sus declaraciones de impuestos respectivas. 1040 income tax forms Los ingresos netos no derivados del trabajo de los hijos en la línea 5 de sus Formularios 8615 son: Sandra — $800 Geraldo — $600 Miguel — $1,000 La línea 7 del Formulario 8615 de Sandra indicará $1,600, o sea, el total de las cantidades anotadas en la línea 5 de los Formularios 8615 de Geraldo y Miguel. 1040 income tax forms La línea 7 del Formulario 8615 de Geraldo indicará $1,800 ($800 + $1,000). 1040 income tax forms La línea 7 del Formulario 8615 de Miguel indicará $1,400 ($800 + $600). 1040 income tax forms Si no está disponible la información de los otros hijos. 1040 income tax forms   Si no está disponible la cantidad de los ingresos netos no derivados del trabajo de los otros hijos antes de que venza el plazo para presentar la declaración, preséntela anotando cálculos aproximados o solicite una prórroga del plazo para presentarla. 1040 income tax forms Vea Si no se obtiene a tiempo la información de la declaración del padre o de la madre , anteriormente. 1040 income tax forms Línea 11 (impuesto provisional). 1040 income tax forms   Reste la línea 10 de la línea 9 y anote el resultado en esta línea. 1040 income tax forms Éste es el impuesto provisional. 1040 income tax forms   Si la línea 7 está en blanco, ignore las líneas 12a y 12b y anote en la línea 13 la cantidad proveniente de la línea 11. 1040 income tax forms Ignore asimismo el tema siguiente que trata de las líneas 12a y 12b. 1040 income tax forms Líneas 12a y 12b (dividiendo el impuesto provisional). 1040 income tax forms   Si anota alguna cantidad en la línea 7 (fuera de cero), divida el impuesto provisional indicado en la línea 11 entre los hijos según la participación de cada hijo en el total de los ingresos netos no derivados del trabajo. 1040 income tax forms Esto se hace en las líneas 12a, 12b y 13. 1040 income tax forms Sume la cantidad de la línea 7 a la de la línea 5 y anote el total en la línea 12a. 1040 income tax forms Divida la cantidad de la línea 5 entre la de la línea 12a y anote el resultado, como número decimal, en la línea 12b. 1040 income tax forms Ejemplo. 1040 income tax forms En el ejemplo anterior bajo Línea 7 (ingresos netos no derivados del trabajo de otros hijos), el Formulario 8615 de Sandra indica $1,600 en la línea 7. 1040 income tax forms La cantidad anotada en la línea 12a es $2,400, o sea, el total de las cantidades provenientes de las líneas 5 y 7 ($800 + $1,600). 1040 income tax forms El número decimal en la línea 12b es . 1040 income tax forms 333, calculado de la siguienta manera y redondeado hasta tres decimales:   $800 = . 1040 income tax forms 333     $2,400   Paso 3. 1040 income tax forms Cómo Calcular el Impuesto del Hijo (Parte III del Formulario 8615) El último paso para calcular el impuesto de su hijo utilizando el Formulario 8615 es determinar la cantidad mayor entre: El total de: La parte del impuesto provisional correspondiente al hijo basado en la tasa impositiva del padre o de la madre, más El impuesto sobre los ingresos tributables del hijo que sean superiores a los ingresos netos no derivados del trabajo, calculado a la tasa impositiva del hijo o El impuesto sobre los ingresos tributables del hijo calculado a la tasa impositiva del hijo. 1040 income tax forms Éste es el impuesto del hijo. 1040 income tax forms Se calcula en las líneas 14 a 18 del Formulario 8615. 1040 income tax forms Impuesto mínimo alternativo. 1040 income tax forms   Un hijo puede estar sujeto al impuesto mínimo alternativo (AMT, por sus siglas en inglés) si cuenta con determinados elementos que reciben un trato preferente conforme a la ley tributaria. 1040 income tax forms Vea el tema titulado Impuesto Mínimo Alternativo (AMT) , en el capítulo 30. 1040 income tax forms    Para información adicional acerca de quién tiene que pagar el AMT y cómo calcularlo, vea el Formulario 6251, Alternative Minimum Tax—Individuals (Impuesto mínimo alternativo—individuos), en inglés. 1040 income tax forms Para información sobre límites especiales aplicables a un hijo que presente el Formulario 6251, vea Certain Children Under Age 24 (Determinados hijos menores de 24 años de edad), en las Instrucciones para el Formulario 6251, en inglés. 1040 income tax forms Prev  Up  Next   Home   More Online Publications
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The 1040 Income Tax Forms

1040 income tax forms 2. 1040 income tax forms   Depreciation of Rental Property Table of Contents The BasicsWhat Rental Property Can Be Depreciated? When Does Depreciation Begin and End? Depreciation Methods Basis of Depreciable Property Claiming the Special Depreciation Allowance MACRS DepreciationDepreciation Systems Property Classes Under GDS Recovery Periods Under GDS Conventions Figuring Your Depreciation Deduction Figuring MACRS Depreciation Under ADS Claiming the Correct Amount of Depreciation You recover the cost of income producing property through yearly tax deductions. 1040 income tax forms You do this by depreciating the property; that is, by deducting some of the cost each year on your tax return. 1040 income tax forms Three factors determine how much depreciation you can deduct each year: (1) your basis in the property, (2) the recovery period for the property, and (3) the depreciation method used. 1040 income tax forms You cannot simply deduct your mortgage or principal payments, or the cost of furniture, fixtures and equipment, as an expense. 1040 income tax forms You can deduct depreciation only on the part of your property used for rental purposes. 1040 income tax forms Depreciation reduces your basis for figuring gain or loss on a later sale or exchange. 1040 income tax forms You may have to use Form 4562 to figure and report your depreciation. 1040 income tax forms See Which Forms To Use in chapter 3. 1040 income tax forms Also see Publication 946. 1040 income tax forms Section 179 deduction. 1040 income tax forms   The section 179 deduction is a means of recovering part or all of the cost of certain qualifying property in the year you place the property in service. 1040 income tax forms This deduction is not allowed for property used in connection with residential rental property. 1040 income tax forms See chapter 2 of Publication 946. 1040 income tax forms Alternative minimum tax (AMT). 1040 income tax forms   If you use accelerated depreciation, you may be subject to the AMT. 1040 income tax forms Accelerated depreciation allows you to deduct more depreciation earlier in the recovery period than you could deduct using a straight line method (same deduction each year). 1040 income tax forms   The prescribed depreciation methods for rental real estate are not accelerated, so the depreciation deduction is not adjusted for the AMT. 1040 income tax forms However, accelerated methods are generally used for other property connected with rental activities (for example, appliances and wall-to-wall carpeting). 1040 income tax forms   To find out if you are subject to the AMT, see the Instructions for Form 6251. 1040 income tax forms The Basics The following section discusses the information you will need to have about the rental property and the decisions to be made before figuring your depreciation deduction. 1040 income tax forms What Rental Property Can Be Depreciated? You can depreciate your property if it meets all the following requirements. 1040 income tax forms You own the property. 1040 income tax forms You use the property in your business or income-producing activity (such as rental property). 1040 income tax forms The property has a determinable useful life. 1040 income tax forms The property is expected to last more than one year. 1040 income tax forms Property you own. 1040 income tax forms   To claim depreciation, you usually must be the owner of the property. 1040 income tax forms You are considered as owning property even if it is subject to a debt. 1040 income tax forms Rented property. 1040 income tax forms   Generally, if you pay rent for property, you cannot depreciate that property. 1040 income tax forms Usually, only the owner can depreciate it. 1040 income tax forms However, if you make permanent improvements to leased property, you may be able to depreciate the improvements. 1040 income tax forms See Additions or improvements to property , later in this chapter, under Recovery Periods Under GDS. 1040 income tax forms Cooperative apartments. 1040 income tax forms   If you are a tenant-stockholder in a cooperative housing corporation and rent your cooperative apartment to others, you can deduct depreciation on your stock in the corporation. 1040 income tax forms See chapter 4, Special Situations. 1040 income tax forms Property having a determinable useful life. 1040 income tax forms   To be depreciable, your property must have a determinable useful life. 1040 income tax forms This means that it must be something that wears out, decays, gets used up, becomes obsolete, or loses its value from natural causes. 1040 income tax forms What Rental Property Cannot Be Depreciated? Certain property cannot be depreciated. 1040 income tax forms This includes land and certain excepted property. 1040 income tax forms Land. 1040 income tax forms   You cannot depreciate the cost of land because land generally does not wear out, become obsolete, or get used up. 1040 income tax forms But if it does, the loss is accounted for upon disposition. 1040 income tax forms The costs of clearing, grading, planting, and landscaping are usually all part of the cost of land and cannot be depreciated. 1040 income tax forms   Although you cannot depreciate land, you can depreciate certain land preparation costs, such as landscaping costs, incurred in preparing land for business use. 1040 income tax forms These costs must be so closely associated with other depreciable property that you can determine a life for them along with the life of the associated property. 1040 income tax forms Example. 1040 income tax forms You built a new house to use as a rental and paid for grading, clearing, seeding, and planting bushes and trees. 1040 income tax forms Some of the bushes and trees were planted right next to the house, while others were planted around the outer border of the lot. 1040 income tax forms If you replace the house, you would have to destroy the bushes and trees right next to it. 1040 income tax forms These bushes and trees are closely associated with the house, so they have a determinable useful life. 1040 income tax forms Therefore, you can depreciate them. 1040 income tax forms Add your other land preparation costs to the basis of your land because they have no determinable life and you cannot depreciate them. 1040 income tax forms Excepted property. 1040 income tax forms   Even if the property meets all the requirements listed earlier under What Rental Property Can Be Depreciated , you cannot depreciate the following property. 1040 income tax forms Property placed in service and disposed of (or taken out of business use) in the same year. 1040 income tax forms Equipment used to build capital improvements. 1040 income tax forms You must add otherwise allowable depreciation on the equipment during the period of construction to the basis of your improvements. 1040 income tax forms For more information, see chapter 1 of Publication 946. 1040 income tax forms When Does Depreciation Begin and End? You begin to depreciate your rental property when you place it in service for the production of income. 1040 income tax forms You stop depreciating it either when you have fully recovered your cost or other basis, or when you retire it from service, whichever happens first. 1040 income tax forms Placed in Service You place property in service in a rental activity when it is ready and available for a specific use in that activity. 1040 income tax forms Even if you are not using the property, it is in service when it is ready and available for its specific use. 1040 income tax forms Example 1. 1040 income tax forms On November 22 of last year, you purchased a dishwasher for your rental property. 1040 income tax forms The appliance was delivered on December 7, but was not installed and ready for use until January 3 of this year. 1040 income tax forms Because the dishwasher was not ready for use last year, it is not considered placed in service until this year. 1040 income tax forms If the appliance had been installed and ready for use when it was delivered in December of last year, it would have been considered placed in service in December, even if it was not actually used until this year. 1040 income tax forms Example 2. 1040 income tax forms On April 6, you purchased a house to use as residential rental property. 1040 income tax forms You made extensive repairs to the house and had it ready for rent on July 5. 1040 income tax forms You began to advertise the house for rent in July and actually rented it beginning September 1. 1040 income tax forms The house is considered placed in service in July when it was ready and available for rent. 1040 income tax forms You can begin to depreciate the house in July. 1040 income tax forms Example 3. 1040 income tax forms You moved from your home in July. 1040 income tax forms During August and September you made several repairs to the house. 1040 income tax forms On October 1, you listed the property for rent with a real estate company, which rented it on December 1. 1040 income tax forms The property is considered placed in service on October 1, the date when it was available for rent. 1040 income tax forms Conversion to business use. 1040 income tax forms   If you place property in service in a personal activity, you cannot claim depreciation. 1040 income tax forms However, if you change the property's use to business or the production of income, you can begin to depreciate it at the time of the change. 1040 income tax forms You place the property in service for business or income-producing use on the date of the change. 1040 income tax forms Example. 1040 income tax forms You bought a house and used it as your personal home several years before you converted it to rental property. 1040 income tax forms Although its specific use was personal and no depreciation was allowable, you placed the home in service when you began using it as your home. 1040 income tax forms You can begin to claim depreciation in the year you converted it to rental property because at that time its use changed to the production of income. 1040 income tax forms Idle Property Continue to claim a deduction for depreciation on property used in your rental activity even if it is temporarily idle (not in use). 1040 income tax forms For example, if you must make repairs after a tenant moves out, you still depreciate the rental property during the time it is not available for rent. 1040 income tax forms Cost or Other Basis Fully Recovered You must stop depreciating property when the total of your yearly depreciation deductions equals your cost or other basis of your property. 1040 income tax forms For this purpose, your yearly depreciation deductions include any depreciation that you were allowed to claim, even if you did not claim it. 1040 income tax forms See Basis of Depreciable Property , later. 1040 income tax forms Retired From Service You stop depreciating property when you retire it from service, even if you have not fully recovered its cost or other basis. 1040 income tax forms You retire property from service when you permanently withdraw it from use in a trade or business or from use in the production of income because of any of the following events. 1040 income tax forms You sell or exchange the property. 1040 income tax forms You convert the property to personal use. 1040 income tax forms You abandon the property. 1040 income tax forms The property is destroyed. 1040 income tax forms Depreciation Methods Generally, you must use the Modified Accelerated Cost Recovery System (MACRS) to depreciate residential rental property placed in service after 1986. 1040 income tax forms If you placed rental property in service before 1987, you are using one of the following methods. 1040 income tax forms ACRS (Accelerated Cost Recovery System) for property placed in service after 1980 but before 1987. 1040 income tax forms Straight line or declining balance method over the useful life of property placed in service before 1981. 1040 income tax forms See MACRS Depreciation , later, for more information. 1040 income tax forms Rental property placed in service before 2013. 1040 income tax forms   Continue to use the same method of figuring depreciation that you used in the past. 1040 income tax forms Use of real property changed. 1040 income tax forms   Generally, you must use MACRS to depreciate real property that you acquired for personal use before 1987 and changed to business or income-producing use after 1986. 1040 income tax forms This includes your residence that you changed to rental use. 1040 income tax forms See Property Owned or Used in 1986 in Publication 946, chapter 1, for those situations in which MACRS is not allowed. 1040 income tax forms Improvements made after 1986. 1040 income tax forms   Treat an improvement made after 1986 to property you placed in service before 1987 as separate depreciable property. 1040 income tax forms As a result, you can depreciate that improvement as separate property under MACRS if it is the type of property that otherwise qualifies for MACRS depreciation. 1040 income tax forms For more information about improvements, see Additions or improvements to property , later in this chapter under Recovery Periods Under GDS. 1040 income tax forms This publication discusses MACRS depreciation only. 1040 income tax forms If you need information about depreciating property placed in service before 1987, see Publication 534. 1040 income tax forms Basis of Depreciable Property The basis of property used in a rental activity is generally its adjusted basis when you place it in service in that activity. 1040 income tax forms This is its cost or other basis when you acquired it, adjusted for certain items occurring before you place it in service in the rental activity. 1040 income tax forms If you depreciate your property under MACRS, you may also have to reduce your basis by certain deductions and credits with respect to the property. 1040 income tax forms Basis and adjusted basis are explained in the following discussions. 1040 income tax forms If you used the property for personal purposes before changing it to rental use, its basis for depreciation is the lesser of its adjusted basis or its fair market value when you change it to rental use. 1040 income tax forms See Basis of Property Changed to Rental Use in chapter 4. 1040 income tax forms Cost Basis The basis of property you buy is usually its cost. 1040 income tax forms The cost is the amount you pay for it in cash, in debt obligation, in other property, or in services. 1040 income tax forms Your cost also includes amounts you pay for: Sales tax charged on the purchase (but see Exception next), Freight charges to obtain the property, and Installation and testing charges. 1040 income tax forms Exception. 1040 income tax forms   If you deducted state and local general sales taxes as an itemized deduction on Schedule A (Form 1040), do not include those sales taxes as part of your cost basis. 1040 income tax forms Such taxes were deductible before 1987 and after 2003. 1040 income tax forms Loans with low or no interest. 1040 income tax forms   If you buy property on any time-payment plan that charges little or no interest, the basis of your property is your stated purchase price, less the amount considered to be unstated interest. 1040 income tax forms See Unstated Interest and Original Issue Discount (OID) in Publication 537, Installment Sales. 1040 income tax forms Real property. 1040 income tax forms   If you buy real property, such as a building and land, certain fees and other expenses you pay are part of your cost basis in the property. 1040 income tax forms Real estate taxes. 1040 income tax forms   If you buy real property and agree to pay real estate taxes on it that were owed by the seller and the seller does not reimburse you, the taxes you pay are treated as part of your basis in the property. 1040 income tax forms You cannot deduct them as taxes paid. 1040 income tax forms   If you reimburse the seller for real estate taxes the seller paid for you, you can usually deduct that amount. 1040 income tax forms Do not include that amount in your basis in the property. 1040 income tax forms Settlement fees and other costs. 1040 income tax forms   The following settlement fees and closing costs for buying the property are part of your basis in the property. 1040 income tax forms Abstract fees. 1040 income tax forms Charges for installing utility services. 1040 income tax forms Legal fees. 1040 income tax forms Recording fees. 1040 income tax forms Surveys. 1040 income tax forms Transfer taxes. 1040 income tax forms Title insurance. 1040 income tax forms Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. 1040 income tax forms   The following are settlement fees and closing costs you cannot include in your basis in the property. 1040 income tax forms Fire insurance premiums. 1040 income tax forms Rent or other charges relating to occupancy of the property before closing. 1040 income tax forms Charges connected with getting or refinancing a loan, such as: Points (discount points, loan origination fees), Mortgage insurance premiums, Loan assumption fees, Cost of a credit report, and Fees for an appraisal required by a lender. 1040 income tax forms   Also, do not include amounts placed in escrow for the future payment of items such as taxes and insurance. 1040 income tax forms Assumption of a mortgage. 1040 income tax forms   If you buy property and become liable for an existing mortgage on the property, your basis is the amount you pay for the property plus the amount remaining to be paid on the mortgage. 1040 income tax forms Example. 1040 income tax forms You buy a building for $60,000 cash and assume a mortgage of $240,000 on it. 1040 income tax forms Your basis is $300,000. 1040 income tax forms Separating cost of land and buildings. 1040 income tax forms   If you buy buildings and your cost includes the cost of the land on which they stand, you must divide the cost between the land and the buildings to figure the basis for depreciation of the buildings. 1040 income tax forms The part of the cost that you allocate to each asset is the ratio of the fair market value of that asset to the fair market value of the whole property at the time you buy it. 1040 income tax forms   If you are not certain of the fair market values of the land and the buildings, you can divide the cost between them based on their assessed values for real estate tax purposes. 1040 income tax forms Example. 1040 income tax forms You buy a house and land for $200,000. 1040 income tax forms The purchase contract does not specify how much of the purchase price is for the house and how much is for the land. 1040 income tax forms The latest real estate tax assessment on the property was based on an assessed value of $160,000, of which $136,000 was for the house and $24,000 was for the land. 1040 income tax forms You can allocate 85% ($136,000 ÷ $160,000) of the purchase price to the house and 15% ($24,000 ÷ $160,000) of the purchase price to the land. 1040 income tax forms Your basis in the house is $170,000 (85% of $200,000) and your basis in the land is $30,000 (15% of $200,000). 1040 income tax forms Basis Other Than Cost You cannot use cost as a basis for property that you received: In return for services you performed; In an exchange for other property; As a gift; From your spouse, or from your former spouse as the result of a divorce; or As an inheritance. 1040 income tax forms If you received property in one of these ways, see Publication 551 for information on how to figure your basis. 1040 income tax forms Adjusted Basis To figure your property's basis for depreciation, you may have to make certain adjustments (increases and decreases) to the basis of the property for events occurring between the time you acquired the property and the time you placed it in service for business or the production of income. 1040 income tax forms The result of these adjustments to the basis is the adjusted basis. 1040 income tax forms Increases to basis. 1040 income tax forms   You must increase the basis of any property by the cost of all items properly added to a capital account. 1040 income tax forms These include the following. 1040 income tax forms The cost of any additions or improvements made before placing your property into service as a rental that have a useful life of more than 1 year. 1040 income tax forms Amounts spent after a casualty to restore the damaged property. 1040 income tax forms The cost of extending utility service lines to the property. 1040 income tax forms Legal fees, such as the cost of defending and perfecting title, or settling zoning issues. 1040 income tax forms Additions or improvements. 1040 income tax forms   Add to the basis of your property the amount an addition or improvement actually cost you, including any amount you borrowed to make the addition or improvement. 1040 income tax forms This includes all direct costs, such as material and labor, but does not include your own labor. 1040 income tax forms It also includes all expenses related to the addition or improvement. 1040 income tax forms   For example, if you had an architect draw up plans for remodeling your property, the architect's fee is a part of the cost of the remodeling. 1040 income tax forms Or, if you had your lot surveyed to put up a fence, the cost of the survey is a part of the cost of the fence. 1040 income tax forms   Keep separate accounts for depreciable additions or improvements made after you place the property in service in your rental activity. 1040 income tax forms For information on depreciating additions or improvements, see Additions or improvements to property , later in this chapter, under Recovery Periods Under GDS. 1040 income tax forms    The cost of landscaping improvements is usually treated as an addition to the basis of the land, which is not depreciable. 1040 income tax forms However, see What Rental Property Cannot Be Depreciated, earlier. 1040 income tax forms Assessments for local improvements. 1040 income tax forms   Assessments for items which tend to increase the value of property, such as streets and sidewalks, must be added to the basis of the property. 1040 income tax forms For example, if your city installs curbing on the street in front of your house, and assesses you and your neighbors for its cost, you must add the assessment to the basis of your property. 1040 income tax forms Also add the cost of legal fees paid to obtain a decrease in an assessment levied against property to pay for local improvements. 1040 income tax forms You cannot deduct these items as taxes or depreciate them. 1040 income tax forms    However, you can deduct as taxes, charges or assessments for maintenance, repairs, or interest charges related to the improvements. 1040 income tax forms Do not add them to your basis in the property. 1040 income tax forms Deducting vs. 1040 income tax forms capitalizing costs. 1040 income tax forms   Do not add to your basis costs you can deduct as current expenses. 1040 income tax forms However, there are certain costs you can choose either to deduct or to capitalize. 1040 income tax forms If you capitalize these costs, include them in your basis. 1040 income tax forms If you deduct them, do not include them in your basis. 1040 income tax forms   The costs you may choose to deduct or capitalize include carrying charges, such as interest and taxes, that you must pay to own property. 1040 income tax forms   For more information about deducting or capitalizing costs and how to make the election, see Carrying Charges in Publication 535, chapter 7. 1040 income tax forms Decreases to basis. 1040 income tax forms   You must decrease the basis of your property by any items that represent a return of your cost. 1040 income tax forms These include the following. 1040 income tax forms Insurance or other payment you receive as the result of a casualty or theft loss. 1040 income tax forms Casualty loss not covered by insurance for which you took a deduction. 1040 income tax forms Amount(s) you receive for granting an easement. 1040 income tax forms Residential energy credits you were allowed before 1986, or after 2005, if you added the cost of the energy items to the basis of your home. 1040 income tax forms Exclusion from income of subsidies for energy conservation measures. 1040 income tax forms Special depreciation allowance claimed on qualified property. 1040 income tax forms Depreciation you deducted, or could have deducted, on your tax returns under the method of depreciation you chose. 1040 income tax forms If you did not deduct enough or deducted too much in any year, see Depreciation under Decreases to Basis in Publication 551. 1040 income tax forms   If your rental property was previously used as your main home, you must also decrease the basis by the following. 1040 income tax forms Gain you postponed from the sale of your main home before May 7, 1997, if the replacement home was converted to your rental property. 1040 income tax forms District of Columbia first-time homebuyer credit allowed on the purchase of your main home after August 4, 1997 and before January 1, 2012. 1040 income tax forms Amount of qualified principal residence indebtedness discharged on or after January 1, 2007. 1040 income tax forms Claiming the Special Depreciation Allowance For 2013, your residential rental property may qualify for a special depreciation allowance. 1040 income tax forms This allowance is figured before you figure your regular depreciation deduction. 1040 income tax forms See Publication 946, chapter 3, for details. 1040 income tax forms Also see the Instructions for Form 4562, Line 14. 1040 income tax forms If you qualify for, but choose not to take, a special depreciation allowance, you must attach a statement to your return. 1040 income tax forms The details of this election are in Publication 946, chapter 3, and the Instructions for Form 4562, Line 14. 1040 income tax forms MACRS Depreciation Most business and investment property placed in service after 1986 is depreciated using MACRS. 1040 income tax forms This section explains how to determine which MACRS depreciation system applies to your property. 1040 income tax forms It also discusses other information you need to know before you can figure depreciation under MACRS. 1040 income tax forms This information includes the property's: Recovery class, Applicable recovery period, Convention, Placed-in-service date, Basis for depreciation, and Depreciation method. 1040 income tax forms Depreciation Systems MACRS consists of two systems that determine how you depreciate your property—the General Depreciation System (GDS) and the Alternative Depreciation System (ADS). 1040 income tax forms You must use GDS unless you are specifically required by law to use ADS or you elect to use ADS. 1040 income tax forms Excluded Property You cannot use MACRS for certain personal property (such as furniture or appliances) placed in service in your rental property in 2013 if it had been previously placed in service before 1987 when MACRS became effective. 1040 income tax forms In most cases, personal property is excluded from MACRS if you (or a person related to you) owned or used it in 1986 or if your tenant is a person (or someone related to the person) who owned or used it in 1986. 1040 income tax forms However, the property is not excluded if your 2013 deduction under MACRS (using a half-year convention) is less than the deduction you would have under ACRS. 1040 income tax forms For more information, see What Method Can You Use To Depreciate Your Property? in Publication 946, chapter 1. 1040 income tax forms Electing ADS If you choose, you can use the ADS method for most property. 1040 income tax forms Under ADS, you use the straight line method of depreciation. 1040 income tax forms The election of ADS for one item in a class of property generally applies to all property in that class that is placed in service during the tax year of the election. 1040 income tax forms However, the election applies on a property-by-property basis for residential rental property and nonresidential real property. 1040 income tax forms If you choose to use ADS for your residential rental property, the election must be made in the first year the property is placed in service. 1040 income tax forms Once you make this election, you can never revoke it. 1040 income tax forms For property placed in service during 2013, you make the election to use ADS by entering the depreciation on Form 4562, Part III, Section C, line 20c. 1040 income tax forms Property Classes Under GDS Each item of property that can be depreciated under MACRS is assigned to a property class, determined by its class life. 1040 income tax forms The property class generally determines the depreciation method, recovery period, and convention. 1040 income tax forms The property classes under GDS are: 3-year property, 5-year property, 7-year property, 10-year property, 15-year property, 20-year property, Nonresidential real property, and Residential rental property. 1040 income tax forms Under MACRS, property that you placed in service during 2013 in your rental activities generally falls into one of the following classes. 1040 income tax forms 5-year property. 1040 income tax forms This class includes computers and peripheral equipment, office machinery (typewriters, calculators, copiers, etc. 1040 income tax forms ), automobiles, and light trucks. 1040 income tax forms This class also includes appliances, carpeting, furniture, etc. 1040 income tax forms , used in a residential rental real estate activity. 1040 income tax forms Depreciation on automobiles, other property used for transportation, computers and related peripheral equipment, and property of a type generally used for entertainment, recreation, or amusement is limited. 1040 income tax forms See chapter 5 of Publication 946. 1040 income tax forms 7-year property. 1040 income tax forms This class includes office furniture and equipment (desks, file cabinets, etc. 1040 income tax forms ). 1040 income tax forms This class also includes any property that does not have a class life and that has not been designated by law as being in any other class. 1040 income tax forms 15-year property. 1040 income tax forms This class includes roads, fences, and shrubbery (if depreciable). 1040 income tax forms Residential rental property. 1040 income tax forms This class includes any real property that is a rental building or structure (including a mobile home) for which 80% or more of the gross rental income for the tax year is from dwelling units. 1040 income tax forms It does not include a unit in a hotel, motel, inn, or other establishment where more than half of the units are used on a transient basis. 1040 income tax forms If you live in any part of the building or structure, the gross rental income includes the fair rental value of the part you live in. 1040 income tax forms The other property classes do not generally apply to property used in rental activities. 1040 income tax forms These classes are not discussed in this publication. 1040 income tax forms See Publication 946 for more information. 1040 income tax forms Recovery Periods Under GDS The recovery period of property is the number of years over which you recover its cost or other basis. 1040 income tax forms The recovery periods are generally longer under ADS than GDS. 1040 income tax forms The recovery period of property depends on its property class. 1040 income tax forms Under GDS, the recovery period of an asset is generally the same as its property class. 1040 income tax forms Class lives and recovery periods for most assets are listed in Appendix B of Publication 946. 1040 income tax forms See Table 2-1 for recovery periods of property commonly used in residential rental activities. 1040 income tax forms Qualified Indian reservation property. 1040 income tax forms   Shorter recovery periods are provided under MACRS for qualified Indian reservation property placed in service on Indian reservations. 1040 income tax forms For more information, see chapter 4 of Publication 946. 1040 income tax forms Additions or improvements to property. 1040 income tax forms   Treat additions or improvements you make to your depreciable rental property as separate property items for depreciation purposes. 1040 income tax forms   The property class and recovery period of the addition or improvement is the one that would apply to the original property if you had placed it in service at the same time as the addition or improvement. 1040 income tax forms   The recovery period for an addition or improvement to property begins on the later of: The date the addition or improvement is placed in service, or The date the property to which the addition or improvement was made is placed in service. 1040 income tax forms Example. 1040 income tax forms You own a residential rental house that you have been renting since 1986 and depreciating under ACRS. 1040 income tax forms You built an addition onto the house and placed it in service in 2013. 1040 income tax forms You must use MACRS for the addition. 1040 income tax forms Under GDS, the addition is depreciated as residential rental property over 27. 1040 income tax forms 5 years. 1040 income tax forms Table 2-1. 1040 income tax forms MACRS Recovery Periods for Property Used in Rental Activities   MACRS Recovery Period   Type of Property General Depreciation System Alternative Depreciation System   Computers and their peripheral equipment 5 years 5 years   Office machinery, such as: Typewriters Calculators Copiers 5 years 6 years   Automobiles 5 years 5 years   Light trucks 5 years 5 years   Appliances, such as: Stoves Refrigerators 5 years 9 years   Carpets 5 years 9 years   Furniture used in rental property 5 years 9 years   Office furniture and equipment, such as: Desks Files 7 years 10 years   Any property that does not have a class life and that has not been designated by law as being in any other class 7 years 12 years   Roads 15 years 20 years   Shrubbery 15 years 20 years   Fences 15 years 20 years   Residential rental property (buildings or structures) and structural components such as furnaces, waterpipes, venting, etc. 1040 income tax forms 27. 1040 income tax forms 5 years 40 years   Additions and improvements, such as a new roof The same recovery period as that of the property to which the addition or improvement is made, determined as if the property were placed in service at the same time as the addition or improvement. 1040 income tax forms   Conventions A convention is a method established under MACRS to set the beginning and end of the recovery period. 1040 income tax forms The convention you use determines the number of months for which you can claim depreciation in the year you place property in service and in the year you dispose of the property. 1040 income tax forms Mid-month convention. 1040 income tax forms    A mid-month convention is used for all residential rental property and nonresidential real property. 1040 income tax forms Under this convention, you treat all property placed in service, or disposed of, during any month as placed in service, or disposed of, at the midpoint of that month. 1040 income tax forms Mid-quarter convention. 1040 income tax forms   A mid-quarter convention must be used if the mid-month convention does not apply and the total depreciable basis of MACRS property placed in service in the last 3 months of a tax year (excluding nonresidential real property, residential rental property, and property placed in service and disposed of in the same year) is more than 40% of the total basis of all such property you place in service during the year. 1040 income tax forms   Under this convention, you treat all property placed in service, or disposed of, during any quarter of a tax year as placed in service, or disposed of, at the midpoint of the quarter. 1040 income tax forms Example. 1040 income tax forms During the tax year, Tom Martin purchased the following items to use in his rental property. 1040 income tax forms He elects not to claim the special depreciation allowance discussed earlier. 1040 income tax forms A dishwasher for $400 that he placed in service in January. 1040 income tax forms Used furniture for $100 that he placed in service in September. 1040 income tax forms A refrigerator for $800 that he placed in service in October. 1040 income tax forms Tom uses the calendar year as his tax year. 1040 income tax forms The total basis of all property placed in service that year is $1,300. 1040 income tax forms The $800 basis of the refrigerator placed in service during the last 3 months of his tax year exceeds $520 (40% × $1,300). 1040 income tax forms Tom must use the mid-quarter convention instead of the half-year convention for all three items. 1040 income tax forms Half-year convention. 1040 income tax forms    The half-year convention is used if neither the mid-quarter convention nor the mid-month convention applies. 1040 income tax forms Under this convention, you treat all property placed in service, or disposed of, during a tax year as placed in service, or disposed of, at the midpoint of that tax year. 1040 income tax forms   If this convention applies, you deduct a half year of depreciation for the first year and the last year that you depreciate the property. 1040 income tax forms You deduct a full year of depreciation for any other year during the recovery period. 1040 income tax forms Figuring Your Depreciation Deduction You can figure your MACRS depreciation deduction in one of two ways. 1040 income tax forms The deduction is substantially the same both ways. 1040 income tax forms You can either: Actually compute the deduction using the depreciation method and convention that apply over the recovery period of the property, or Use the percentage from the MACRS percentage tables. 1040 income tax forms In this publication we will use the percentage tables. 1040 income tax forms For instructions on how to compute the deduction, see chapter 4 of Publication 946. 1040 income tax forms Residential rental property. 1040 income tax forms   You must use the straight line method and a mid-month convention for residential rental property. 1040 income tax forms In the first year that you claim depreciation for residential rental property, you can claim depreciation only for the number of months the property is in use, and you must use the mid-month convention (explained under Conventions , earlier). 1040 income tax forms 5-, 7-, or 15-year property. 1040 income tax forms   For property in the 5- or 7-year class, use the 200% declining balance method and a half-year convention. 1040 income tax forms However, in limited cases you must use the mid-quarter convention, if it applies. 1040 income tax forms For property in the 15-year class, use the 150% declining balance method and a half-year convention. 1040 income tax forms   You can also choose to use the 150% declining balance method for property in the 5- or 7-year class. 1040 income tax forms The choice to use the 150% method for one item in a class of property applies to all property in that class that is placed in service during the tax year of the election. 1040 income tax forms You make this election on Form 4562. 1040 income tax forms In Part III, column (f), enter “150 DB. 1040 income tax forms ” Once you make this election, you cannot change to another method. 1040 income tax forms   If you use either the 200% or 150% declining balance method, you figure your deduction using the straight line method in the first tax year that the straight line method gives you an equal or larger deduction. 1040 income tax forms   You can also choose to use the straight line method with a half-year or mid-quarter convention for 5-, 7-, or 15-year property. 1040 income tax forms The choice to use the straight line method for one item in a class of property applies to all property in that class that is placed in service during the tax year of the election. 1040 income tax forms You elect the straight line method on Form 4562. 1040 income tax forms In Part III, column (f), enter “S/L. 1040 income tax forms ” Once you make this election, you cannot change to another method. 1040 income tax forms MACRS Percentage Tables You can use the percentages in Table 2-2, earlier, to compute annual depreciation under MACRS. 1040 income tax forms The tables show the percentages for the first few years or until the change to the straight line method is made. 1040 income tax forms See Appendix A of Publication 946 for complete tables. 1040 income tax forms The percentages in Tables 2-2a, 2-2b, and 2-2c make the change from declining balance to straight line in the year that straight line will give a larger deduction. 1040 income tax forms If you elect to use the straight line method for 5-, 7-, or 15-year property, or the 150% declining balance method for 5- or 7-year property, use the tables in Appendix A of Publication 946. 1040 income tax forms How to use the percentage tables. 1040 income tax forms   You must apply the table rates to your property's unadjusted basis (defined below) each year of the recovery period. 1040 income tax forms   Once you begin using a percentage table to figure depreciation, you must continue to use it for the entire recovery period unless there is an adjustment to the basis of your property for a reason other than: Depreciation allowed or allowable, or An addition or improvement that is depreciated as a separate item of property. 1040 income tax forms   If there is an adjustment for any reason other than (1) or (2), for example, because of a deductible casualty loss, you can no longer use the table. 1040 income tax forms For the year of the adjustment and for the remaining recovery period, figure depreciation using the property's adjusted basis at the end of the year and the appropriate depreciation method, as explained earlier under Figuring Your Depreciation Deduction . 1040 income tax forms See Figuring the Deduction Without Using the Tables in Publication 946, chapter 4. 1040 income tax forms Unadjusted basis. 1040 income tax forms   This is the same basis you would use to figure gain on a sale (see Basis of Depreciable Property , earlier), but without reducing your original basis by any MACRS depreciation taken in earlier years. 1040 income tax forms   However, you do reduce your original basis by other amounts claimed on the property, including: Any amortization, Any section 179 deduction, and Any special depreciation allowance. 1040 income tax forms For more information, see chapter 4 of Publication 946. 1040 income tax forms Please click here for the text description of the image. 1040 income tax forms Table 2-2 Tables 2-2a, 2-2b, and 2-2c. 1040 income tax forms   The percentages in these tables take into account the half-year and mid-quarter conventions. 1040 income tax forms Use Table 2-2a for 5-year property, Table 2-2b for 7-year property, and Table 2-2c for 15-year property. 1040 income tax forms Use the percentage in the second column (half-year convention) unless you are required to use the mid-quarter convention (explained earlier). 1040 income tax forms If you must use the mid-quarter convention, use the column that corresponds to the calendar year quarter in which you placed the property in service. 1040 income tax forms Example 1. 1040 income tax forms You purchased a stove and refrigerator and placed them in service in June. 1040 income tax forms Your basis in the stove is $600 and your basis in the refrigerator is $1,000. 1040 income tax forms Both are 5-year property. 1040 income tax forms Using the half-year convention column in Table 2-2a, the depreciation percentage for Year 1 is 20%. 1040 income tax forms For that year your depreciation deduction is $120 ($600 × . 1040 income tax forms 20) for the stove and $200 ($1,000 × . 1040 income tax forms 20) for the refrigerator. 1040 income tax forms For Year 2, the depreciation percentage is 32%. 1040 income tax forms That year's depreciation deduction will be $192 ($600 × . 1040 income tax forms 32) for the stove and $320 ($1,000 × . 1040 income tax forms 32) for the refrigerator. 1040 income tax forms Example 2. 1040 income tax forms Assume the same facts as in Example 1, except you buy the refrigerator in October instead of June. 1040 income tax forms Since the refrigerator was placed in service in the last 3 months of the tax year, and its basis ($1,000) is more than 40% of the total basis of all property placed in service during the year ($1,600 × . 1040 income tax forms 40 = $640), you are required to use the mid-quarter convention to figure depreciation on both the stove and refrigerator. 1040 income tax forms Because you placed the refrigerator in service in October, you use the fourth quarter column of Table 2-2a and find the depreciation percentage for Year 1 is 5%. 1040 income tax forms Your depreciation deduction for the refrigerator is $50 ($1,000 x . 1040 income tax forms 05). 1040 income tax forms Because you placed the stove in service in June, you use the second quarter column of Table 2-2a and find the depreciation percentage for Year 1 is 25%. 1040 income tax forms For that year, your depreciation deduction for the stove is $150 ($600 x . 1040 income tax forms 25). 1040 income tax forms Table 2-2d. 1040 income tax forms    Use this table when you are using the GDS 27. 1040 income tax forms 5 year option for residential rental property. 1040 income tax forms Find the row for the month that you placed the property in service. 1040 income tax forms Use the percentages listed for that month to figure your depreciation deduction. 1040 income tax forms The mid-month convention is taken into account in the percentages shown in the table. 1040 income tax forms Continue to use the same row (month) under the column for the appropriate year. 1040 income tax forms Example. 1040 income tax forms You purchased a single family rental house for $185,000 and placed it in service on February 8. 1040 income tax forms The sales contract showed that the building cost $160,000 and the land cost $25,000. 1040 income tax forms Your basis for depreciation is its original cost, $160,000. 1040 income tax forms This is the first year of service for your residential rental property and you decide to use GDS which has a recovery period of 27. 1040 income tax forms 5 years. 1040 income tax forms Using Table 2-2d, you find that the percentage for property placed in service in February of Year 1 is 3. 1040 income tax forms 182%. 1040 income tax forms That year's depreciation deduction is $5,091 ($160,000 x . 1040 income tax forms 03182). 1040 income tax forms Figuring MACRS Depreciation Under ADS Table 2–1, earlier, shows the ADS recovery periods for property used in rental activities. 1040 income tax forms See Appendix B in Publication 946 for other property. 1040 income tax forms If your property is not listed in Appendix B, it is considered to have no class life. 1040 income tax forms Under ADS, personal property with no class life is depreciated using a recovery period of 12 years. 1040 income tax forms Use the mid-month convention for residential rental property and nonresidential real property. 1040 income tax forms For all other property, use the half-year or mid-quarter convention, as appropriate. 1040 income tax forms See Publication 946 for ADS depreciation tables. 1040 income tax forms Claiming the Correct Amount of Depreciation You should claim the correct amount of depreciation each tax year. 1040 income tax forms If you did not claim all the depreciation you were entitled to deduct, you must still reduce your basis in the property by the full amount of depreciation that you could have deducted. 1040 income tax forms For more information, see Depreciation under Decreases to Basis in Publication 551. 1040 income tax forms If you deducted an incorrect amount of depreciation for property in any year, you may be able to make a correction by filing Form 1040X, Amended U. 1040 income tax forms S. 1040 income tax forms Individual Income Tax Return. 1040 income tax forms If you are not allowed to make the correction on an amended return, you can change your accounting method to claim the correct amount of depreciation. 1040 income tax forms Filing an amended return. 1040 income tax forms   You can file an amended return to correct the amount of depreciation claimed for any property in any of the following situations. 1040 income tax forms You claimed the incorrect amount because of a mathematical error made in any year. 1040 income tax forms You claimed the incorrect amount because of a posting error made in any year. 1040 income tax forms You have not adopted a method of accounting for property placed in service by you in tax years ending after December 29, 2003. 1040 income tax forms You claimed the incorrect amount on property placed in service by you in tax years ending before December 30, 2003. 1040 income tax forms   Generally, you adopt a method of accounting for depreciation by using a permissible method of determining depreciation when you file your first tax return for the property used in your rental activity. 1040 income tax forms This also occurs when you use the same impermissible method of determining depreciation (for example, using the wrong MACRS recovery period) in two or more consecutively filed tax returns. 1040 income tax forms   If an amended return is allowed, you must file it by the later of the following dates. 1040 income tax forms 3 years from the date you filed your original return for the year in which you did not deduct the correct amount. 1040 income tax forms A return filed before an unextended due date is considered filed on that due date. 1040 income tax forms 2 years from the time you paid your tax for that year. 1040 income tax forms Changing your accounting method. 1040 income tax forms   To change your accounting method, you generally must file Form 3115, Application for Change in Accounting Method, to get the consent of the IRS. 1040 income tax forms In some instances, that consent is automatic. 1040 income tax forms For more information, see Changing Your Accounting Method in Publication 946,  chapter 1. 1040 income tax forms Prev  Up  Next   Home   More Online Publications