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1040a 2011 Tax Form

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1040a 2011 Tax Form

1040a 2011 tax form Publication 596SP - Introductory Material Table of Contents Acontecimientos Futuros ¿Qué es el Crédito por Ingreso del Trabajo (EIC)? ¿Puedo Reclamar el Crédito por Ingreso del Trabajo (EIC)? ¿Necesito esta Publicación? ¿Hay que Tener un Hijo para Tener Derecho al Crédito por Ingreso del Trabajo (EIC)? ¿Cómo Calculo la Cantidad del Crédito por Ingreso del Trabajo (EIC)? ¿Cómo Puedo Encontrar Rápidamente Información Específica? ¿Hay Ayuda Disponible en Internet? Qué Hay de Nuevo para el año 2013 Recordatorios Acontecimientos Futuros Para la información más actualizada sobre los acontecimientos que afectan la Publicación 596(SP), tales como legislación promulgada después de su publicación, visite www. 1040a 2011 tax form irs. 1040a 2011 tax form gov/pub596sp, en inglés. 1040a 2011 tax form ¿Qué es el Crédito por Ingreso del Trabajo (EIC)? El crédito por ingreso del trabajo (EIC, por sus siglas en inglés) es un crédito tributario para aquellas personas que trabajan y que reciben ingreso del trabajo inferior a $51,567. 1040a 2011 tax form Un crédito tributario significa que va a tener más dinero disponible porque reduce la cantidad de impuesto a pagar. 1040a 2011 tax form El crédito por ingreso del trabajo (EIC) también podría proporcionarle un reembolso. 1040a 2011 tax form ¿Puedo Reclamar el Crédito por Ingreso del Trabajo (EIC)? Para tener derecho al crédito por ingreso del trabajo (EIC), tiene que cumplir determinados requisitos. 1040a 2011 tax form Dichos requisitos se resumen en la Tabla 1. 1040a 2011 tax form Tabla 1. 1040a 2011 tax form Síntesis del Crédito por Ingreso del Trabajo Primero, tiene que cumplir todos los requisitos de esta columna. 1040a 2011 tax form Segundo, tiene que cumplir todos los requisitos de una de estas columnas, la que le corresponda. 1040a 2011 tax form Tercero, tiene que cumplir el requisito de esta columna. 1040a 2011 tax form Capítulo 1. 1040a 2011 tax form  Requisitos para Todos Capítulo 2. 1040a 2011 tax form  Requisitos que Tiene que Cumplir si Tiene un Hijo Calificado Capítulo 3. 1040a 2011 tax form  Requisitos que Tiene que Cumplir si no Tiene un Hijo Calificado Capítulo 4. 1040a 2011 tax form  Calcular y Reclamar el Crédito por Ingreso del Trabajo (EIC) 1. 1040a 2011 tax form Tiene que tener  ingresos brutos ajustados (AGI, por sus siglas en inglés) inferiores a:  • $46,227 ($51,567 para casados que presentan una declaración conjunta) si tiene tres o más hijos calificados,  • $43,038 ($48,378 para casados que presentan una declaración conjunta) si tiene dos hijos calificados,  • $37,870 ($43,210 para casados que presentan una declaración conjunta) si tiene un hijo calificado o  • $14,340 ($19,680 para casados que presentan una declaración conjunta) si no tiene un hijo calificado. 1040a 2011 tax form 2. 1040a 2011 tax form Tiene que tener un número de Seguro Social válido. 1040a 2011 tax form   3. 1040a 2011 tax form Su estado civil para efectos de la declaración no puede ser  “casado que presenta la declaración por separado”. 1040a 2011 tax form   4. 1040a 2011 tax form Tiene que ser ciudadano de los Estados Unidos o extranjero residente durante todo el año. 1040a 2011 tax form   5. 1040a 2011 tax form No puede presentar el Formulario 2555 ni el Formulario 2555-EZ (relacionado con el ingreso del trabajo en el extranjero). 1040a 2011 tax form   6. 1040a 2011 tax form Sus ingresos procedentes de inversiones tienen que ser de $3,300 o menos. 1040a 2011 tax form    7. 1040a 2011 tax form Tiene que haber recibido ingreso del trabajo. 1040a 2011 tax form 8. 1040a 2011 tax form Su hijo tiene que cumplir los requisitos de parentesco, edad, residencia y de declaración conjunta. 1040a 2011 tax form   9. 1040a 2011 tax form Soló una persona puede utilizar su hijo calificado para fines de reclamar el crédito por ingreso del trabajo (EIC). 1040a 2011 tax form   10. 1040a 2011 tax form Usted no puede ser el hijo calificado de otra persona. 1040a 2011 tax form 11. 1040a 2011 tax form Tiene que tener por lo menos 25 años de edad pero menos de 65 años de edad. 1040a 2011 tax form   12. 1040a 2011 tax form Usted no puede ser dependiente de otra persona. 1040a 2011 tax form   13. 1040a 2011 tax form Usted no puede ser el hijo calificado de otra persona. 1040a 2011 tax form   14. 1040a 2011 tax form Tiene que haber vivido en los Estados Unidos durante más de la mitad del año. 1040a 2011 tax form 15. 1040a 2011 tax form Tiene que tener ingresos del trabajo inferiores a:  • $46,227 ($51,567 para casados que presentan una declaración conjunta) si tiene tres o más hijos calificados,  • $43,038 ($48,378 para casados que presentan una declaración conjunta) si tiene dos hijos calificados,  • $37,870 ($43,210 para casados que presentan una declaración conjunta) si tiene un hijo calificado o  • $14,340 ($19,680 para casados que presentan una declaración conjunta) si no tiene un hijo calificado. 1040a 2011 tax form ¿Necesito esta Publicación? Algunas personas que presenten el Formulario 1040 tienen que usar la Hoja de Trabajo 1 de esta publicación, en vez de consultar el Paso 2 de las instrucciones para el Formulario 1040, para determinar si pueden reclamar el crédito por ingreso del trabajo (EIC). 1040a 2011 tax form Usted se encuentra en esta categoría si alguna de las siguientes situaciones le corresponde para el año 2013. 1040a 2011 tax form Presenta el Anexo E (Formulario 1040). 1040a 2011 tax form Declara ingresos provenientes del alquiler de bienes inmuebles/muebles que no son utilizados en un oficio o negocio. 1040a 2011 tax form Declara ingresos en la línea 21 del Formulario 1040 que provienen del Formulario 8814 (relacionados con la elección de declarar los intereses y dividendos recibidos por un hijo). 1040a 2011 tax form Declara una cantidad en la línea 13 del Formulario 1040 que incluye una cantidad del Formulario 4797. 1040a 2011 tax form Si ninguna de las situaciones que aparecen anteriormente le corresponde, las instrucciones del formulario de impuestos contienen toda la información que necesita para saber si puede reclamar el crédito por ingreso del trabajo (EIC) y para calcular la cantidad del mismo. 1040a 2011 tax form No necesita esta publicación, pero puede leerla para saber si puede reclamar el crédito por ingreso del trabajo (EIC) y para aprender más sobre este crédito. 1040a 2011 tax form ¿Hay que Tener un Hijo para Tener Derecho al Crédito por Ingreso del Trabajo (EIC)? No. 1040a 2011 tax form Puede reunir los requisitos del crédito por ingreso del trabajo (EIC) aunque no tenga un hijo calificado si usted tiene como mínimo 25 años de edad pero menos de 65 años y tiene ingresos del trabajo inferiores a $14,340 ($19,680 si es casado que presenta una declaración conjunta). 1040a 2011 tax form Vea el capítulo 3 para información adicional. 1040a 2011 tax form ¿Cómo Calculo la Cantidad del Crédito por Ingreso del Trabajo (EIC)? Si puede reclamar el crédito por ingreso del trabajo (EIC), tiene la opción de solicitar que el IRS le calcule la cantidad del crédito o puede calcularlo usted mismo. 1040a 2011 tax form Para calcularlo usted mismo, puede llenar la hoja de trabajo que se encuentra en las instrucciones del formulario que presente. 1040a 2011 tax form Para saber cómo solicitar que el IRS le calcule la cantidad del crédito, vea el capítulo 4. 1040a 2011 tax form ¿Cómo Puedo Encontrar Rápidamente Información Específica? Puede utilizar el índice para buscar información específica. 1040a 2011 tax form En la mayoría de los casos, el índice hace referencia a títulos, tablas u hojas de trabajo. 1040a 2011 tax form ¿Hay Ayuda Disponible en Internet? Sí. 1040a 2011 tax form Puede utilizar el Asistente EITC en el sitio web www. 1040a 2011 tax form irs. 1040a 2011 tax form gov/espanol para saber si tiene derecho al crédito. 1040a 2011 tax form El Asistente EITC está disponible en español y en inglés. 1040a 2011 tax form Qué Hay de Nuevo para el año 2013 La cantidad de ingresos del trabajo ha aumentado. 1040a 2011 tax form La cantidad máxima de ingresos que usted puede ganar y aún obtener el crédito ha aumentado. 1040a 2011 tax form Tal vez pueda reclamar el crédito si: Tiene tres o más hijos calificados y gana menos de $46,227 ($51,567 si es casado que presenta una declaración conjunta), Tiene dos hijos calificados y gana menos de $43,038 ($48,378 si es casado que presenta una declaración conjunta), Tiene un hijo calificado y gana menos de $37,870 ($43,210 si es casado que presenta una declaración conjunta) o No tiene un hijo calificado y gana menos de $14,340 ($19,680 si es casado que presenta una declaración conjunta). 1040a 2011 tax form Además, tiene que tener ingresos brutos ajustados inferiores a la cantidad que le corresponda de la lista anterior. 1040a 2011 tax form Para más información, vea los Requisitos 1 y 15. 1040a 2011 tax form La cantidad de ingresos de inversiones ha aumentado. 1040a 2011 tax form La cantidad máxima de ingresos de inversiones que usted puede ganar y aún obtener el crédito ha aumentado a $3,300. 1040a 2011 tax form Vea el Requisito 6 —Tiene que tener ingresos de inversiones de $3,300 o menos . 1040a 2011 tax form Recordatorios Aumento del crédito por ingreso del trabajo (EIC) en ciertas declaraciones conjuntas. 1040a 2011 tax form  Una persona casada que presente una declaración conjunta podría recibir un crédito mayor que el que recibe otra persona que tenga los mismos ingresos pero con un estado civil diferente para efectos de la declaración. 1040a 2011 tax form Por lo tanto, la Tabla del Crédito por Ingreso del Trabajo (EIC) tiene columnas distintas para las personas casadas que presenten una declaración conjunta que para los demás. 1040a 2011 tax form Cuando busque su crédito por ingreso del trabajo en la Tabla del Crédito por Ingreso del Trabajo (EIC), asegúrese de usar la columna correcta para su estado civil para efectos de la declaración y el número de hijos que tenga. 1040a 2011 tax form El crédito por ingreso del trabajo (EIC) no afecta ciertos pagos de bienestar social. 1040a 2011 tax form  Todo reembolso que reciba por el crédito por ingreso del trabajo (EIC) no se considera ingreso al determinar si usted u otra persona tiene derecho a recibir beneficios de los programas de asistencia social que se indican a continuación, ni al determinar la cantidad que usted u otra persona puede recibir de algún programa federal, o algún programa estatal o local que recibe todo o parte de sus fondos de fuentes federales. 1040a 2011 tax form Tales programas incluyen los siguientes: Asistencia Temporal para Familias Necesitadas (TANF, por sus siglas en inglés). 1040a 2011 tax form Seguro Medicaid. 1040a 2011 tax form Seguridad de Ingreso Suplementario (SSI, por sus siglas en inglés). 1040a 2011 tax form Programas de Asistencia Suplementaria de Alimentación (SNAP, por sus siglas en inglés) (cupones para alimentos). 1040a 2011 tax form Viviendas para personas de bajos ingresos. 1040a 2011 tax form Además, cuando determine la elegibilidad, el reembolso no podrá ser contado como una fuente de ingresos, durante por lo menos 12 meses después que usted lo reciba. 1040a 2011 tax form Hable con el coordinador de beneficios local para averiguar si su reembolso afectará sus beneficios. 1040a 2011 tax form No se olvide del crédito estatal. 1040a 2011 tax form  Si reúne los requisitos para reclamar el crédito por ingreso del trabajo (EIC) en la declaración de impuestos federales sobre los ingresos, podría tener también derecho a reclamar un crédito parecido en la declaración de impuestos estatales o locales sobre los ingresos. 1040a 2011 tax form Para ver una lista de estados que ofrecen el crédito estatal por ingreso del trabajo, visite www. 1040a 2011 tax form irs. 1040a 2011 tax form gov/eitc. 1040a 2011 tax form En caso de que el IRS cuestione el crédito por ingreso del trabajo (EIC). 1040a 2011 tax form  El IRS puede pedirle que entregue documentos para comprobar que usted tiene derecho al crédito por ingreso del trabajo (EIC). 1040a 2011 tax form Le informaremos cuáles documentos debe enviarnos. 1040a 2011 tax form Éstos pueden incluir actas de nacimiento, expedientes académicos, expedientes médicos, etc. 1040a 2011 tax form El proceso para determinar su derecho al crédito demorará su reembolso. 1040a 2011 tax form Fotografías de niños desaparecidos. 1040a 2011 tax form  El IRS se complace en colaborar con el Centro Nacional de Niños Desaparecidos y Explotados (National Center for Missing and Exploited Children). 1040a 2011 tax form Esta publicación puede contener fotografías de niños desaparecidos seleccionadas por el Centro en páginas que de otra manera estarían en blanco. 1040a 2011 tax form Usted puede ayudar a que estos niños regresen a su hogar si al mirar sus fotografías los identifica y llama gratis al 1-800-THE-LOST (1-800-843-5678). 1040a 2011 tax form Comentarios y sugerencias. 1040a 2011 tax form  Agradeceremos sus comentarios acerca de esta publicación, así como sus sugerencias para ediciones futuras. 1040a 2011 tax form Nos puede escribir a la dirección siguiente:  Internal Revenue Service Tax Forms and Publications 1111 Constitution Ave. 1040a 2011 tax form NW, IR-6526 Washington, DC 20224 Contestamos muchas cartas por teléfono. 1040a 2011 tax form Por lo tanto, sería útil que incluyera en la correspondencia su número de teléfono, con el código de área, para llamar durante el día. 1040a 2011 tax form Usted nos puede enviar comentarios desde la página web en www. 1040a 2011 tax form irs. 1040a 2011 tax form gov/formspubs, en inglés. 1040a 2011 tax form Pulse sobre “More Information,” (Más información) y seleccionando “Give us feedback. 1040a 2011 tax form ” (Proveer comentarios). 1040a 2011 tax form Aunque no podemos contestar individualmente cada comentario, agradecemos sus comentarios y sugerencias y los tendremos en cuenta para ediciones futuras de nuestros productos tributarios. 1040a 2011 tax form Para pedir formularios y publicaciones. 1040a 2011 tax form  Visite www. 1040a 2011 tax form irs. 1040a 2011 tax form gov/formspubs para descargar formularios y publicaciones, llame al 1-800-829-3676 para pedir formularios y publicaciones o escriba a la dirección a continuación para recibir una respuesta dentro de los 10 días después de recibir su solicitud. 1040a 2011 tax form  Internal Revenue Service 1201 N. 1040a 2011 tax form Mitsubishi Motorway Bloomington, IL 61705-6613 Preguntas sobre los impuestos. 1040a 2011 tax form  Si tiene una pregunta sobre los impuestos, verifique la información disponible en IRS. 1040a 2011 tax form gov/espanol o llame al 1-800-829-1040. 1040a 2011 tax form No podemos contestar preguntas sobre impuestos enviadas a ninguna de las dos direcciones anteriores. 1040a 2011 tax form Prev  Up  Next   Home   More Online Publications
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The 1040a 2011 Tax Form

1040a 2011 tax form 1. 1040a 2011 tax form   Rental Income and Expenses (If No Personal Use of Dwelling) Table of Contents Rental IncomeWhen To Report Types of Income Rental ExpensesWhen To Deduct Types of Expenses This chapter discusses the various types of rental income and expenses for a residential rental activity with no personal use of the dwelling. 1040a 2011 tax form Generally, each year you will report all income and deduct all out-of-pocket expenses in full. 1040a 2011 tax form The deduction to recover the cost of your rental property—depreciation—is taken over a prescribed number of years, and is discussed in chapter 2, Depreciation of Rental Property. 1040a 2011 tax form If your rental income is from property you also use personally or rent to someone at less than a fair rental price, first read the information in chapter 5 , Personal Use of Dwelling Unit (Including Vacation Home). 1040a 2011 tax form Rental Income In most cases, you must include in your gross income all amounts you receive as rent. 1040a 2011 tax form Rental income is any payment you receive for the use or occupation of property. 1040a 2011 tax form In addition to amounts you receive as normal rental payments, there are other amounts that may be rental income. 1040a 2011 tax form When To Report When you report rental income on your tax return generally depends on whether you are a cash basis taxpayer or use an accrual method. 1040a 2011 tax form Most individual taxpayers use the cash method. 1040a 2011 tax form Cash method. 1040a 2011 tax form   You are a cash basis taxpayer if you report income on your return in the year you actually or constructively receive it, regardless of when it was earned. 1040a 2011 tax form You constructively receive income when it is made available to you, for example, by being credited to your bank account. 1040a 2011 tax form Accrual method. 1040a 2011 tax form    If you are an accrual basis taxpayer, you generally report income when you earn it, rather than when you receive it. 1040a 2011 tax form You generally deduct your expenses when you incur them, rather than when you pay them. 1040a 2011 tax form More information. 1040a 2011 tax form   See Publication 538, Accounting Periods and Methods, for more information about when you constructively receive income and accrual methods of accounting. 1040a 2011 tax form Types of Income The following are common types of rental income. 1040a 2011 tax form Advance rent. 1040a 2011 tax form   Advance rent is any amount you receive before the period that it covers. 1040a 2011 tax form Include advance rent in your rental income in the year you receive it regardless of the period covered or the method of accounting you use. 1040a 2011 tax form Example. 1040a 2011 tax form On March 18, 2013, you signed a 10-year lease to rent your property. 1040a 2011 tax form During 2013, you received $9,600 for the first year's rent and $9,600 as rent for the last year of the lease. 1040a 2011 tax form You must include $19,200 in your rental income in the first year. 1040a 2011 tax form Canceling a lease. 1040a 2011 tax form   If your tenant pays you to cancel a lease, the amount you receive is rent. 1040a 2011 tax form Include the payment in your income in the year you receive it regardless of your method of accounting. 1040a 2011 tax form Expenses paid by tenant. 1040a 2011 tax form   If your tenant pays any of your expenses, those payments are rental income. 1040a 2011 tax form Because you must include this amount in income, you can also deduct the expenses if they are deductible rental expenses. 1040a 2011 tax form For more information, see Rental Expenses , later. 1040a 2011 tax form Example 1. 1040a 2011 tax form Your tenant pays the water and sewage bill for your rental property and deducts the amount from the normal rent payment. 1040a 2011 tax form Under the terms of the lease, your tenant does not have to pay this bill. 1040a 2011 tax form Include the utility bill paid by the tenant and any amount received as a rent payment in your rental income. 1040a 2011 tax form You can deduct the utility payment made by your tenant as a rental expense. 1040a 2011 tax form Example 2. 1040a 2011 tax form While you are out of town, the furnace in your rental property stops working. 1040a 2011 tax form Your tenant pays for the necessary repairs and deducts the repair bill from the rent payment. 1040a 2011 tax form Include the repair bill paid by the tenant and any amount received as a rent payment in your rental income. 1040a 2011 tax form You can deduct the repair payment made by your tenant as a rental expense. 1040a 2011 tax form Property or services. 1040a 2011 tax form   If you receive property or services as rent, instead of money, include the fair market value of the property or services in your rental income. 1040a 2011 tax form   If the services are provided at an agreed upon or specified price, that price is the fair market value unless there is evidence to the contrary. 1040a 2011 tax form Example. 1040a 2011 tax form Your tenant is a house painter. 1040a 2011 tax form He offers to paint your rental property instead of paying 2 months rent. 1040a 2011 tax form You accept his offer. 1040a 2011 tax form Include in your rental income the amount the tenant would have paid for 2 months rent. 1040a 2011 tax form You can deduct that same amount as a rental expense for painting your property. 1040a 2011 tax form Security deposits. 1040a 2011 tax form   Do not include a security deposit in your income when you receive it if you plan to return it to your tenant at the end of the lease. 1040a 2011 tax form But if you keep part or all of the security deposit during any year because your tenant does not live up to the terms of the lease, include the amount you keep in your income in that year. 1040a 2011 tax form    If an amount called a security deposit is to be used as a final payment of rent, it is advance rent. 1040a 2011 tax form Include it in your income when you receive it. 1040a 2011 tax form Other Sources of Rental Income Lease with option to buy. 1040a 2011 tax form   If the rental agreement gives your tenant the right to buy your rental property, the payments you receive under the agreement are generally rental income. 1040a 2011 tax form If your tenant exercises the right to buy the property, the payments you receive for the period after the date of sale are considered part of the selling price. 1040a 2011 tax form Part interest. 1040a 2011 tax form   If you own a part interest in rental property, you must report your part of the rental income from the property. 1040a 2011 tax form Rental of property also used as your home. 1040a 2011 tax form   If you rent property that you also use as your home and you rent it less than 15 days during the tax year, do not include the rent you receive in your income and do not deduct rental expenses. 1040a 2011 tax form However, you can deduct on Schedule A (Form 1040), Itemized Deductions, the interest, taxes, and casualty and theft losses that are allowed for nonrental property. 1040a 2011 tax form See chapter 5, Personal Use of Dwelling Unit (Including Vacation Home). 1040a 2011 tax form Rental Expenses In most cases, the expenses of renting your property, such as maintenance, insurance, taxes, and interest, can be deducted from your rental income. 1040a 2011 tax form Personal use of rental property. 1040a 2011 tax form   If you sometimes use your rental property for personal purposes, you must divide your expenses between rental and personal use. 1040a 2011 tax form Also, your rental expense deductions may be limited. 1040a 2011 tax form See chapter 5, Personal Use of Dwelling Unit (Including Vacation Home). 1040a 2011 tax form Part interest. 1040a 2011 tax form   If you own a part interest in rental property, you can deduct expenses you paid according to your percentage of ownership. 1040a 2011 tax form Example. 1040a 2011 tax form Roger owns a one-half undivided interest in a rental house. 1040a 2011 tax form Last year he paid $968 for necessary repairs on the property. 1040a 2011 tax form Roger can deduct $484 (50% × $968) as a rental expense. 1040a 2011 tax form He is entitled to reimbursement for the remaining half from the co-owner. 1040a 2011 tax form When To Deduct You generally deduct your rental expenses in the year you pay them. 1040a 2011 tax form If you use the accrual method, see Publication 538 for more information. 1040a 2011 tax form Types of Expenses Listed below are the most common rental expenses. 1040a 2011 tax form Advertising. 1040a 2011 tax form Auto and travel expenses. 1040a 2011 tax form Cleaning and maintenance. 1040a 2011 tax form Commissions. 1040a 2011 tax form Depreciation. 1040a 2011 tax form Insurance. 1040a 2011 tax form Interest (other). 1040a 2011 tax form Legal and other professional fees. 1040a 2011 tax form Local transportation expenses. 1040a 2011 tax form Management fees. 1040a 2011 tax form Mortgage interest paid to banks, etc. 1040a 2011 tax form Points. 1040a 2011 tax form Rental payments. 1040a 2011 tax form Repairs. 1040a 2011 tax form Taxes. 1040a 2011 tax form Utilities. 1040a 2011 tax form Some of these expenses, as well as other less common ones, are discussed below. 1040a 2011 tax form Depreciation. 1040a 2011 tax form   Depreciation is a capital expense. 1040a 2011 tax form It is the mechanism for recovering your cost in an income producing property and must be taken over the expected life of the property. 1040a 2011 tax form   You can begin to depreciate rental property when it is ready and available for rent. 1040a 2011 tax form See Placed in Service under When Does Depreciation Begin and End in chapter 2. 1040a 2011 tax form Insurance premiums paid in advance. 1040a 2011 tax form   If you pay an insurance premium for more than one year in advance, for each year of coverage you can deduct the part of the premium payment that will apply to that year. 1040a 2011 tax form You cannot deduct the total premium in the year you pay it. 1040a 2011 tax form See chapter 6 of Publication 535 for information on deductible premiums. 1040a 2011 tax form Interest expense. 1040a 2011 tax form   You can deduct mortgage interest you pay on your rental property. 1040a 2011 tax form When you refinance a rental property for more than the previous outstanding balance, the portion of the interest allocable to loan proceeds not related to rental use generally cannot be deducted as a rental expense. 1040a 2011 tax form Chapter 4 of Publication 535 explains mortgage interest in detail. 1040a 2011 tax form Expenses paid to obtain a mortgage. 1040a 2011 tax form   Certain expenses you pay to obtain a mortgage on your rental property cannot be deducted as interest. 1040a 2011 tax form These expenses, which include mortgage commissions, abstract fees, and recording fees, are capital expenses that are part of your basis in the property. 1040a 2011 tax form Form 1098, Mortgage Interest Statement. 1040a 2011 tax form   If you paid $600 or more of mortgage interest on your rental property to any one person, you should receive a Form 1098 or similar statement showing the interest you paid for the year. 1040a 2011 tax form If you and at least one other person (other than your spouse if you file a joint return) were liable for, and paid interest on, the mortgage, and the other person received the Form 1098, report your share of the interest on Schedule E (Form 1040), line 13. 1040a 2011 tax form Attach a statement to your return showing the name and address of the other person. 1040a 2011 tax form On the dotted line next to line 13, enter “See attached. 1040a 2011 tax form ” Legal and other professional fees. 1040a 2011 tax form   You can deduct, as a rental expense, legal and other professional expenses such as tax return preparation fees you paid to prepare Schedule E, Part I. 1040a 2011 tax form For example, on your 2013 Schedule E you can deduct fees paid in 2013 to prepare Part I of your 2012 Schedule E. 1040a 2011 tax form You can also deduct, as a rental expense, any expense (other than federal taxes and penalties) you paid to resolve a tax underpayment related to your rental activities. 1040a 2011 tax form Local benefit taxes. 1040a 2011 tax form   In most cases, you cannot deduct charges for local benefits that increase the value of your property, such as charges for putting in streets, sidewalks, or water and sewer systems. 1040a 2011 tax form These charges are nondepreciable capital expenditures and must be added to the basis of your property. 1040a 2011 tax form However, you can deduct local benefit taxes that are for maintaining, repairing, or paying interest charges for the benefits. 1040a 2011 tax form Local transportation expenses. 1040a 2011 tax form   You may be able to deduct your ordinary and necessary local transportation expenses if you incur them to collect rental income or to manage, conserve, or maintain your rental property. 1040a 2011 tax form However, transportation expenses incurred to travel between your home and a rental property generally constitute nondeductible commuting costs unless you use your home as your principal place of business. 1040a 2011 tax form See Publication 587, Business Use of Your Home, for information on determining if your home office qualifies as a principal place of business. 1040a 2011 tax form   Generally, if you use your personal car, pickup truck, or light van for rental activities, you can deduct the expenses using one of two methods: actual expenses or the standard mileage rate. 1040a 2011 tax form For 2013, the standard mileage rate for business use is 56. 1040a 2011 tax form 5 cents per mile. 1040a 2011 tax form For more information, see chapter 4 of Publication 463. 1040a 2011 tax form    To deduct car expenses under either method, you must keep records that follow the rules in chapter 5 of Publication 463. 1040a 2011 tax form In addition, you must complete Form 4562, Part V, and attach it to your tax return. 1040a 2011 tax form Pre-rental expenses. 1040a 2011 tax form   You can deduct your ordinary and necessary expenses for managing, conserving, or maintaining rental property from the time you make it available for rent. 1040a 2011 tax form Rental of equipment. 1040a 2011 tax form   You can deduct the rent you pay for equipment that you use for rental purposes. 1040a 2011 tax form However, in some cases, lease contracts are actually purchase contracts. 1040a 2011 tax form If so, you cannot deduct these payments. 1040a 2011 tax form You can recover the cost of purchased equipment through depreciation. 1040a 2011 tax form Rental of property. 1040a 2011 tax form   You can deduct the rent you pay for property that you use for rental purposes. 1040a 2011 tax form If you buy a leasehold for rental purposes, you can deduct an equal part of the cost each year over the term of the lease. 1040a 2011 tax form Travel expenses. 1040a 2011 tax form   You can deduct the ordinary and necessary expenses of traveling away from home if the primary purpose of the trip is to collect rental income or to manage, conserve, or maintain your rental property. 1040a 2011 tax form You must properly allocate your expenses between rental and nonrental activities. 1040a 2011 tax form You cannot deduct the cost of traveling away from home if the primary purpose of the trip is to improve the property. 1040a 2011 tax form The cost of improvements is recovered by taking depreciation. 1040a 2011 tax form For information on travel expenses, see chapter 1 of Publication 463. 1040a 2011 tax form    To deduct travel expenses, you must keep records that follow the rules in chapter 5 of Publication 463. 1040a 2011 tax form Uncollected rent. 1040a 2011 tax form   If you are a cash basis taxpayer, do not deduct uncollected rent. 1040a 2011 tax form Because you have not included it in your income, it is not deductible. 1040a 2011 tax form   If you use an accrual method, report income when you earn it. 1040a 2011 tax form If you are unable to collect the rent, you may be able to deduct it as a business bad debt. 1040a 2011 tax form See chapter 10 of Publication 535 for more information about business bad debts. 1040a 2011 tax form Vacant rental property. 1040a 2011 tax form   If you hold property for rental purposes, you may be able to deduct your ordinary and necessary expenses (including depreciation) for managing, conserving, or maintaining the property while the property is vacant. 1040a 2011 tax form However, you cannot deduct any loss of rental income for the period the property is vacant. 1040a 2011 tax form Vacant while listed for sale. 1040a 2011 tax form   If you sell property you held for rental purposes, you can deduct the ordinary and necessary expenses for managing, conserving, or maintaining the property until it is sold. 1040a 2011 tax form If the property is not held out and available for rent while listed for sale, the expenses are not deductible rental expenses. 1040a 2011 tax form Points The term “points” is often used to describe some of the charges paid, or treated as paid, by a borrower to take out a loan or a mortgage. 1040a 2011 tax form These charges are also called loan origination fees, maximum loan charges, or premium charges. 1040a 2011 tax form Any of these charges (points) that are solely for the use of money are interest. 1040a 2011 tax form Because points are prepaid interest, you generally cannot deduct the full amount in the year paid, but must deduct the interest over the term of the loan. 1040a 2011 tax form The method used to figure the amount of points you can deduct each year follows the original issue discount (OID) rules. 1040a 2011 tax form In this case, points are equivalent to OID, which is the difference between: The amount borrowed (redemption price at maturity, or principal) and The proceeds (issue price). 1040a 2011 tax form The first step is to determine whether your total OID (which you may have on bonds or other investments in addition to the mortgage loan), including the OID resulting from the points, is insignificant or de minimis. 1040a 2011 tax form If the OID is not de minimis, you must use the constant-yield method to figure how much you can deduct. 1040a 2011 tax form De minimis OID. 1040a 2011 tax form   The OID is de minimis if it is less than one-fourth of 1% (. 1040a 2011 tax form 0025) of the stated redemption price at maturity (principal amount of the loan) multiplied by the number of full years from the date of original issue to maturity (term of the loan). 1040a 2011 tax form   If the OID is de minimis, you can choose one of the following ways to figure the amount of points you can deduct each year. 1040a 2011 tax form On a constant-yield basis over the term of the loan. 1040a 2011 tax form On a straight line basis over the term of the loan. 1040a 2011 tax form In proportion to stated interest payments. 1040a 2011 tax form In its entirety at maturity of the loan. 1040a 2011 tax form You make this choice by deducting the OID (points) in a manner consistent with the method chosen on your timely filed tax return for the tax year in which the loan is issued. 1040a 2011 tax form Example. 1040a 2011 tax form Carol Madison took out a $100,000 mortgage loan on January 1, 2013, to buy a house she will use as a rental during 2013. 1040a 2011 tax form The loan is to be repaid over 30 years. 1040a 2011 tax form During 2013, Carol paid $10,000 of mortgage interest (stated interest) to the lender. 1040a 2011 tax form When the loan was made, she paid $1,500 in points to the lender. 1040a 2011 tax form The points reduced the principal amount of the loan from $100,000 to $98,500, resulting in $1,500 of OID. 1040a 2011 tax form Carol determines that the points (OID) she paid are de minimis based on the following computation. 1040a 2011 tax form Redemption price at maturity (principal amount of the loan) $100,000 Multiplied by: The term of the  loan in complete years ×30 Multiplied by ×. 1040a 2011 tax form 0025 De minimis amount $7,500 The points (OID) she paid ($1,500) are less than the de minimis amount ($7,500). 1040a 2011 tax form Therefore, Carol has de minimis OID and she can choose one of the four ways discussed earlier to figure the amount she can deduct each year. 1040a 2011 tax form Under the straight line method, she can deduct $50 each year for 30 years. 1040a 2011 tax form Constant-yield method. 1040a 2011 tax form   If the OID is not de minimis, you must use the constant-yield method to figure how much you can deduct each year. 1040a 2011 tax form   You figure your deduction for the first year in the following manner. 1040a 2011 tax form Determine the issue price of the loan. 1040a 2011 tax form If you paid points on the loan, the issue price generally is the difference between the principal and the points. 1040a 2011 tax form Multiply the result in (1) by the yield to maturity (defined later). 1040a 2011 tax form Subtract any qualified stated interest payments (defined later) from the result in (2). 1040a 2011 tax form This is the OID you can deduct in the first year. 1040a 2011 tax form Yield to maturity (YTM). 1040a 2011 tax form   This rate is generally shown in the literature you receive from your lender. 1040a 2011 tax form If you do not have this information, consult your lender or tax advisor. 1040a 2011 tax form In general, the YTM is the discount rate that, when used in computing the present value of all principal and interest payments, produces an amount equal to the principal amount of the loan. 1040a 2011 tax form Qualified stated interest (QSI). 1040a 2011 tax form   In general, this is the stated interest that is unconditionally payable in cash or property (other than another loan of the issuer) at least annually over the term of the loan at a fixed rate. 1040a 2011 tax form Example—Year 1. 1040a 2011 tax form The facts are the same as in the previous example. 1040a 2011 tax form The yield to maturity on Carol's loan is 10. 1040a 2011 tax form 2467%, compounded annually. 1040a 2011 tax form She figured the amount of points (OID) she could deduct in 2013 as follows. 1040a 2011 tax form Principal amount of the loan $100,000 Minus: Points (OID) –1,500 Issue price of the loan $98,500 Multiplied by: YTM × . 1040a 2011 tax form 102467 Total 10,093 Minus: QSI –10,000 Points (OID) deductible in 2013 $93 To figure your deduction in any subsequent year, you start with the adjusted issue price. 1040a 2011 tax form To get the adjusted issue price, add to the issue price figured in Year 1 any OID previously deducted. 1040a 2011 tax form Then follow steps (2) and (3), earlier. 1040a 2011 tax form Example—Year 2. 1040a 2011 tax form Carol figured the deduction for 2014 as follows. 1040a 2011 tax form Issue price $98,500 Plus: Points (OID) deducted  in 2013 +93 Adjusted issue price $98,593 Multiplied by: YTM × . 1040a 2011 tax form 102467 Total 10,103 Minus: QSI –10,000 Points (OID) deductible in 2014 $103 Loan or mortgage ends. 1040a 2011 tax form    If your loan or mortgage ends, you may be able to deduct any remaining points (OID) in the tax year in which the loan or mortgage ends. 1040a 2011 tax form A loan or mortgage may end due to a refinancing, prepayment, foreclosure, or similar event. 1040a 2011 tax form However, if the refinancing is with the same lender, the remaining points (OID) generally are not deductible in the year in which the refinancing occurs, but may be deductible over the term of the new mortgage or loan. 1040a 2011 tax form Points when loan refinance is more than the previous outstanding balance. 1040a 2011 tax form   When you refinance a rental property for more than the previous outstanding balance, the portion of the points allocable to loan proceeds not related to rental use generally cannot be deducted as a rental expense. 1040a 2011 tax form For example, if an individual refinanced a loan with a balance of $100,000, the amount of the new loan was $120,000, and the taxpayer used $20,000 to purchase a car, points allocable to the $20,000 would be treated as nondeductible personal interest. 1040a 2011 tax form Repairs and Improvements Generally, an expense for repairing or maintaining your rental property may be deducted if you are not required to capitalize the expense. 1040a 2011 tax form Improvements. 1040a 2011 tax form   You must capitalize any expense you pay to improve your rental property. 1040a 2011 tax form An expense is for an improvement if it results in a betterment to your property, restores your property, or adapts your property to a new or different use. 1040a 2011 tax form Betterments. 1040a 2011 tax form   Expenses that may result in a betterment to your property include expenses for fixing a pre-existing defect or condition, enlarging or expanding your property, or increasing the capacity, strength, or quality of your property. 1040a 2011 tax form Restoration. 1040a 2011 tax form   Expenses that may be for restoration include expenses for replacing a substantial structural part of your property, repairing damage to your property after you properly adjusted the basis of your property as a result of a casualty loss, or rebuilding your property to a like-new condition. 1040a 2011 tax form Adaptation. 1040a 2011 tax form   Expenses that may be for adaptation include expenses for altering your property to a use that is not consistent with the intended ordinary use of your property when you began renting the property. 1040a 2011 tax form Separate the costs of repairs and improvements, and keep accurate records. 1040a 2011 tax form You will need to know the cost of improvements when you sell or depreciate your property. 1040a 2011 tax form The expenses you capitalize for improving your property can generally be depreciated as if the improvement were separate property. 1040a 2011 tax form Table 1-1. 1040a 2011 tax form Examples of Improvements Additions Bedroom Bathroom Deck Garage Porch Patio  Lawn & Grounds Landscaping Driveway Walkway Fence Retaining wall Sprinkler system Swimming pool Miscellaneous Storm windows, doors New roof Central vacuum Wiring upgrades Satellite dish Security system   Heating & Air Conditioning Heating system Central air conditioning Furnace Duct work Central humidifier Filtration system Plumbing Septic system Water heater Soft water system Filtration system  Interior Improvements Built-in appliances Kitchen modernization Flooring Wall-to-wall carpeting  Insulation Attic Walls, floor Pipes, duct work Prev  Up  Next   Home   More Online Publications