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1040ez Instructions 2011

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1040ez Instructions 2011

1040ez instructions 2011 9. 1040ez instructions 2011   Rental Income and Expenses Table of Contents Introduction Useful Items - You may want to see: Rental Income Rental ExpensesVacant while listed for sale. 1040ez instructions 2011 Repairs and Improvements Other Expenses Property Changed to Rental Use Renting Part of Property Not Rented for Profit Personal Use of Dwelling Unit (Including Vacation Home)Example. 1040ez instructions 2011 Dividing Expenses Dwelling Unit Used as a Home Reporting Income and Deductions DepreciationChanging your accounting method to deduct unclaimed depreciation. 1040ez instructions 2011 Limits on Rental LossesAt-Risk Rules Passive Activity Limits How To Report Rental Income and ExpensesSchedule E (Form 1040) Introduction This chapter discusses rental income and expenses. 1040ez instructions 2011 It also covers the following topics. 1040ez instructions 2011 Personal use of dwelling unit (including vacation home). 1040ez instructions 2011 Depreciation. 1040ez instructions 2011 Limits on rental losses. 1040ez instructions 2011 How to report your rental income and expenses. 1040ez instructions 2011 If you sell or otherwise dispose of your rental property, see Publication 544, Sales and Other Dispositions of Assets. 1040ez instructions 2011 If you have a loss from damage to, or theft of, rental property, see Publication 547, Casualties, Disasters, and Thefts. 1040ez instructions 2011 If you rent a condominium or a cooperative apartment, some special rules apply to you even though you receive the same tax treatment as other owners of rental property. 1040ez instructions 2011 See Publication 527, Residential Rental Property, for more information. 1040ez instructions 2011 Useful Items - You may want to see: Publication 527 Residential Rental Property 534 Depreciating Property Placed in Service Before 1987 535 Business Expenses 925 Passive Activity and At-Risk Rules 946 How To Depreciate Property Form (and Instructions) 4562 Depreciation and Amortization 6251 Alternative Minimum Tax—Individuals 8582 Passive Activity Loss Limitations Schedule E (Form 1040) Supplemental Income and Loss Rental Income In most cases, you must include in your gross income all amounts you receive as rent. 1040ez instructions 2011 Rental income is any payment you receive for the use or occupation of property. 1040ez instructions 2011 In addition to amounts you receive as normal rent payments, there are other amounts that may be rental income. 1040ez instructions 2011 When to report. 1040ez instructions 2011   If you are a cash-basis taxpayer, you report rental income on your return for the year you actually or constructively receive it. 1040ez instructions 2011 You are a cash-basis taxpayer if you report income in the year you receive it, regardless of when it was earned. 1040ez instructions 2011 You constructively receive income when it is made available to you, for example, by being credited to your bank account. 1040ez instructions 2011   For more information about when you constructively receive income, see Accounting Methods in chapter 1. 1040ez instructions 2011 Advance rent. 1040ez instructions 2011   Advance rent is any amount you receive before the period that it covers. 1040ez instructions 2011 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. 1040ez instructions 2011 Example. 1040ez instructions 2011 You sign a 10-year lease to rent your property. 1040ez instructions 2011 In the first year, you receive $5,000 for the first year's rent and $5,000 as rent for the last year of the lease. 1040ez instructions 2011 You must include $10,000 in your income in the first year. 1040ez instructions 2011 Canceling a lease. 1040ez instructions 2011   If your tenant pays you to cancel a lease, the amount you receive is rent. 1040ez instructions 2011 Include the payment in your income in the year you receive it regardless of your method of accounting. 1040ez instructions 2011 Expenses paid by tenant. 1040ez instructions 2011   If your tenant pays any of your expenses, the payments are rental income. 1040ez instructions 2011 Because you must include this amount in income, you can deduct the expenses if they are deductible rental expenses. 1040ez instructions 2011 See Rental Expenses , later, for more information. 1040ez instructions 2011 Property or services. 1040ez instructions 2011   If you receive property or services, instead of money, as rent, include the fair market value of the property or services in your rental income. 1040ez instructions 2011   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. 1040ez instructions 2011 Security deposits. 1040ez instructions 2011   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. 1040ez instructions 2011 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. 1040ez instructions 2011   If an amount called a security deposit is to be used as a final payment of rent, it is advance rent. 1040ez instructions 2011 Include it in your income when you receive it. 1040ez instructions 2011 Part interest. 1040ez instructions 2011   If you own a part interest in rental property, you must report your part of the rental income from the property. 1040ez instructions 2011 Rental of property also used as your home. 1040ez instructions 2011   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. 1040ez instructions 2011 However, you can deduct on Schedule A (Form 1040) the interest, taxes, and casualty and theft losses that are allowed for nonrental property. 1040ez instructions 2011 See Personal Use of Dwelling Unit (Including Vacation Home) , later. 1040ez instructions 2011 Rental Expenses This part discusses expenses of renting property that you ordinarily can deduct from your rental income. 1040ez instructions 2011 It includes information on the expenses you can deduct if you rent part of your property, or if you change your property to rental use. 1040ez instructions 2011 Depreciation , which you can also deduct from your rental income, is discussed later. 1040ez instructions 2011 Personal use of rental property. 1040ez instructions 2011   If you sometimes use your rental property for personal purposes, you must divide your expenses between rental and personal use. 1040ez instructions 2011 Also, your rental expense deductions may be limited. 1040ez instructions 2011 See Personal Use of Dwelling Unit (Including Vacation Home) , later. 1040ez instructions 2011 Part interest. 1040ez instructions 2011   If you own a part interest in rental property, you can deduct expenses that you paid according to your percentage of ownership. 1040ez instructions 2011 When to deduct. 1040ez instructions 2011   If you are a cash-basis taxpayer, you generally deduct your rental expenses in the year you pay them. 1040ez instructions 2011 Depreciation. 1040ez instructions 2011   You can begin to depreciate rental property when it is ready and available for rent. 1040ez instructions 2011 See Placed-in-Service under When Does Depreciation Begin and End in chapter 2 of Publication 527. 1040ez instructions 2011 Pre-rental expenses. 1040ez instructions 2011   You can deduct your ordinary and necessary expenses for managing, conserving, or maintaining rental property from the time you make it available for rent. 1040ez instructions 2011 Uncollected rent. 1040ez instructions 2011   If you are a cash-basis taxpayer, do not deduct uncollected rent. 1040ez instructions 2011 Because you have not included it in your income, it is not deductible. 1040ez instructions 2011 Vacant rental property. 1040ez instructions 2011   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. 1040ez instructions 2011 However, you cannot deduct any loss of rental income for the period the property is vacant. 1040ez instructions 2011 Vacant while listed for sale. 1040ez instructions 2011   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. 1040ez instructions 2011 If the property is not held out and available for rent while listed for sale, the expenses are not deductible rental expenses. 1040ez instructions 2011 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. 1040ez instructions 2011 Improvements. 1040ez instructions 2011   You must capitalize any expense you pay to improve your rental property. 1040ez instructions 2011 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. 1040ez instructions 2011 Betterments. 1040ez instructions 2011   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. 1040ez instructions 2011 Restoration. 1040ez instructions 2011   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. 1040ez instructions 2011 Adaptation. 1040ez instructions 2011   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. 1040ez instructions 2011 Separate the costs of repairs and improvements, and keep accurate records. 1040ez instructions 2011 You will need to know the cost of improvements when you sell or depreciate your property. 1040ez instructions 2011 The expenses you capitalize for improving your property can generally be depreciated as if the improvement were separate property. 1040ez instructions 2011 Other Expenses Other expenses you can deduct from your rental income include advertising, cleaning and maintenance, utilities, fire and liability insurance, taxes, interest, commissions for the collection of rent, ordinary and necessary travel and transportation, and other expenses, discussed next. 1040ez instructions 2011 Insurance premiums paid in advance. 1040ez instructions 2011   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. 1040ez instructions 2011 You cannot deduct the total premium in the year you pay it. 1040ez instructions 2011 Legal and other professional fees. 1040ez instructions 2011   You can deduct, as a rental expense, legal and other professional expenses, such as tax return preparation fees you paid to prepare Schedule E (Form 1040), Part I. 1040ez instructions 2011 For example, on your 2013 Schedule E, you can deduct fees paid in 2013 to prepare your 2012 Schedule E, Part I. 1040ez instructions 2011 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. 1040ez instructions 2011 Local benefit taxes. 1040ez instructions 2011   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. 1040ez instructions 2011 These charges are nondepreciable capital expenditures, and must be added to the basis of your property. 1040ez instructions 2011 However, you can deduct local benefit taxes that are for maintaining, repairing, or paying interest charges for the benefits. 1040ez instructions 2011 Local transportation expenses. 1040ez instructions 2011    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. 1040ez instructions 2011 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. 1040ez instructions 2011 See Publication 587, Business Use of Your Home, for information on determining if your home office qualifies as a principal place of business. 1040ez instructions 2011   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. 1040ez instructions 2011 For 2013, the standard mileage rate for business use is 56. 1040ez instructions 2011 5 cents per mile. 1040ez instructions 2011 For more information, see chapter 26. 1040ez instructions 2011    To deduct car expenses under either method, you must keep records that follow the rules in chapter 26. 1040ez instructions 2011 In addition, you must complete Form 4562, Part V, and attach it to your tax return. 1040ez instructions 2011 Rental of equipment. 1040ez instructions 2011   You can deduct the rent you pay for equipment that you use for rental purposes. 1040ez instructions 2011 However, in some cases, lease contracts are actually purchase contracts. 1040ez instructions 2011 If so, you cannot deduct these payments. 1040ez instructions 2011 You can recover the cost of purchased equipment through depreciation. 1040ez instructions 2011 Rental of property. 1040ez instructions 2011   You can deduct the rent you pay for property that you use for rental purposes. 1040ez instructions 2011 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. 1040ez instructions 2011 Travel expenses. 1040ez instructions 2011   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. 1040ez instructions 2011 You must properly allocate your expenses between rental and nonrental activities. 1040ez instructions 2011 You cannot deduct the cost of traveling away from home if the primary purpose of the trip was to improve your property. 1040ez instructions 2011 You recover the cost of improvements by taking depreciation. 1040ez instructions 2011 For information on travel expenses, see chapter 26. 1040ez instructions 2011    To deduct travel expenses, you must keep records that follow the rules in chapter 26. 1040ez instructions 2011   See Rental Expenses in Publication 527 for more information. 1040ez instructions 2011 Property Changed to Rental Use If you change your home or other property (or a part of it) to rental use at any time other than the beginning of your tax year, you must divide yearly expenses, such as taxes and insurance, between rental use and personal use. 1040ez instructions 2011 You can deduct as rental expenses only the part of the expense that is for the part of the year the property was used or held for rental purposes. 1040ez instructions 2011 You cannot deduct depreciation or insurance for the part of the year the property was held for personal use. 1040ez instructions 2011 However, you can include the home mortgage interest, qualified mortgage insurance premiums, and real estate tax expenses for the part of the year the property was held for personal use as an itemized deduction on Schedule A (Form 1040). 1040ez instructions 2011 Example. 1040ez instructions 2011 Your tax year is the calendar year. 1040ez instructions 2011 You moved from your home in May and started renting it out on June 1. 1040ez instructions 2011 You can deduct as rental expenses seven-twelfths of your yearly expenses, such as taxes and insurance. 1040ez instructions 2011 Starting with June, you can deduct as rental expenses the amounts you pay for items generally billed monthly, such as utilities. 1040ez instructions 2011 Renting Part of Property If you rent part of your property, you must divide certain expenses between the part of the property used for rental purposes and the part of the property used for personal purposes, as though you actually had two separate pieces of property. 1040ez instructions 2011 You can deduct the expenses related to the part of the property used for rental purposes, such as home mortgage interest, qualified mortgage insurance premiums, and real estate taxes, as rental expenses on Schedule E (Form 1040). 1040ez instructions 2011 You can also deduct as rental expenses a portion of other expenses that normally are nondeductible personal expenses, such as expenses for electricity or painting the outside of your house. 1040ez instructions 2011 There is no change in the types of expenses deductible for the personal-use part of your property. 1040ez instructions 2011 Generally, these expenses may be deducted only if you itemize your deductions on Schedule A (Form 1040). 1040ez instructions 2011 You cannot deduct any part of the cost of the first phone line even if your tenants have unlimited use of it. 1040ez instructions 2011 You do not have to divide the expenses that belong only to the rental part of your property. 1040ez instructions 2011 For example, if you paint a room that you rent, or if you pay premiums for liability insurance in connection with renting a room in your home, your entire cost is a rental expense. 1040ez instructions 2011 If you install a second phone line strictly for your tenants' use, all of the cost of the second line is deductible as a rental expense. 1040ez instructions 2011 You can deduct depreciation, discussed later, on the part of the house used for rental purposes as well as on the furniture and equipment you use for rental purposes. 1040ez instructions 2011 How to divide expenses. 1040ez instructions 2011   If an expense is for both rental use and personal use, such as mortgage interest or heat for the entire house, you must divide the expense between the rental use and the personal use. 1040ez instructions 2011 You can use any reasonable method for dividing the expense. 1040ez instructions 2011 It may be reasonable to divide the cost of some items (for example, water) based on the number of people using them. 1040ez instructions 2011 The two most common methods for dividing an expense are based on (1) the number of rooms in your home, and (2) the square footage of your home. 1040ez instructions 2011 Not Rented for Profit If you do not rent your property to make a profit, you can deduct your rental expenses only up to the amount of your rental income. 1040ez instructions 2011 You cannot deduct a loss or carry forward to the next year any rental expenses that are more than your rental income for the year. 1040ez instructions 2011 For more information about the rules for an activity not engaged in for profit, see Not-for-Profit Activities in chapter 1 of Publication 535. 1040ez instructions 2011 Where to report. 1040ez instructions 2011   Report your not-for-profit rental income on Form 1040, line 21. 1040ez instructions 2011 For example, you can include your mortgage interest and any qualified mortgage insurance premiums (if you use the property as your main home or second home), real estate taxes, and casualty losses on the appropriate lines of Schedule A (Form 1040) if you itemize your deductions. 1040ez instructions 2011   If you itemize your deductions, claim your other rental expenses, subject to the rules explained in chapter 1 of Publication 535, as miscellaneous itemized deductions on Form 1040, Schedule A, line 23. 1040ez instructions 2011 You can deduct these expenses only if they, together with certain other miscellaneous itemized deductions, total more than 2% of your adjusted gross income. 1040ez instructions 2011 Personal Use of Dwelling Unit (Including Vacation Home) If you have any personal use of a dwelling unit (including a vacation home) that you rent, you must divide your expenses between rental use and personal use. 1040ez instructions 2011 In general, your rental expenses will be no more than your total expenses multiplied by a fraction; the denominator of which is the total number of days the dwelling unit is used and the numerator of which is the total number of days actually rented at a fair rental price. 1040ez instructions 2011 Only your rental expenses may be deducted on Schedule E (Form 1040). 1040ez instructions 2011 Some of your personal expenses may be deductible if you itemize your deductions on Schedule A (Form 1040). 1040ez instructions 2011 You must also determine if the dwelling unit is considered a home. 1040ez instructions 2011 The amount of rental expenses that you can deduct may be limited if the dwelling unit is considered a home. 1040ez instructions 2011 Whether a dwelling unit is considered a home depends on how many days during the year are considered to be days of personal use. 1040ez instructions 2011 There is a special rule if you used the dwelling unit as a home and you rented it for less than 15 days during the year. 1040ez instructions 2011 Dwelling unit. 1040ez instructions 2011   A dwelling unit includes a house, apartment, condominium, mobile home, boat, vacation home, or similar property. 1040ez instructions 2011 It also includes all structures or other property belonging to the dwelling unit. 1040ez instructions 2011 A dwelling unit has basic living accommodations, such as sleeping space, a toilet, and cooking facilities. 1040ez instructions 2011   A dwelling unit does not include property used solely as a hotel, motel, inn, or similar establishment. 1040ez instructions 2011 Property is used solely as a hotel, motel, inn, or similar establishment if it is regularly available for occupancy by paying customers and is not used by an owner as a home during the year. 1040ez instructions 2011 Example. 1040ez instructions 2011   You rent a room in your home that is always available for short-term occupancy by paying customers. 1040ez instructions 2011 You do not use the room yourself, and you allow only paying customers to use the room. 1040ez instructions 2011 The room is used solely as a hotel, motel, inn, or similar establishment and is not a dwelling unit. 1040ez instructions 2011 Dividing Expenses If you use a dwelling unit for both rental and personal purposes, divide your expenses between the rental use and the personal use based on the number of days used for each purpose. 1040ez instructions 2011 When dividing your expenses, follow these rules. 1040ez instructions 2011 Any day that the unit is rented at a fair rental price is a day of rental use even if you used the unit for personal purposes that day. 1040ez instructions 2011 This rule does not apply when determining whether you used the unit as a home. 1040ez instructions 2011 Any day that the unit is available for rent but not actually rented is not a day of rental use. 1040ez instructions 2011 Example. 1040ez instructions 2011 Your beach cottage was available for rent from June 1 through August 31 (92 days). 1040ez instructions 2011 During that time, except for the first week in August (7 days) when you were unable to find a renter, you rented the cottage at a fair rental price. 1040ez instructions 2011 The person who rented the cottage for July allowed you to use it over the weekend (2 days) without any reduction in or refund of rent. 1040ez instructions 2011 Your family also used the cottage during the last 2 weeks of May (14 days). 1040ez instructions 2011 The cottage was not used at all before May 17 or after August 31. 1040ez instructions 2011 You figure the part of the cottage expenses to treat as rental expenses as follows. 1040ez instructions 2011 The cottage was used for rental a total of 85 days (92 − 7). 1040ez instructions 2011 The days it was available for rent but not rented (7 days) are not days of rental use. 1040ez instructions 2011 The July weekend (2 days) you used it is rental use because you received a fair rental price for the weekend. 1040ez instructions 2011 You used the cottage for personal purposes for 14 days (the last 2 weeks in May). 1040ez instructions 2011 The total use of the cottage was 99 days (14 days personal use + 85 days rental use). 1040ez instructions 2011 Your rental expenses are 85/99 (86%) of the cottage expenses. 1040ez instructions 2011 Note. 1040ez instructions 2011 When determining whether you used the cottage as a home, the July weekend (2 days) you used it is considered personal use even though you received a fair rental price for the weekend. 1040ez instructions 2011 Therefore, you had 16 days of personal use and 83 days of rental use for this purpose. 1040ez instructions 2011 Because you used the cottage for personal purposes more than 14 days and more than 10% of the days of rental use (8 days), you used it as a home. 1040ez instructions 2011 If you have a net loss, you may not be able to deduct all of the rental expenses. 1040ez instructions 2011 See Dwelling Unit Used as a Home, next. 1040ez instructions 2011 Dwelling Unit Used as a Home If you use a dwelling unit for both rental and personal purposes, the tax treatment of the rental expenses you figured earlier under Dividing Expenses and rental income depends on whether you are considered to be using the dwelling unit as a home. 1040ez instructions 2011 You use a dwelling unit as a home during the tax year if you use it for personal purposes more than the greater of: 14 days, or 10% of the total days it is rented to others at a fair rental price. 1040ez instructions 2011 See What is a day of personal use , later. 1040ez instructions 2011 Fair rental price. 1040ez instructions 2011   A fair rental price for your property generally is the amount of rent that a person who is not related to you would be willing to pay. 1040ez instructions 2011 The rent you charge is not a fair rental price if it is substantially less than the rents charged for other properties that are similar to your property in your area. 1040ez instructions 2011   If a dwelling unit is used for personal purposes on a day it is rented at a fair rental price, do not count that day as a day of rental use in applying (2) above. 1040ez instructions 2011 Instead, count it as a day of personal use in applying both (1) and (2) above. 1040ez instructions 2011 What is a day of personal use?   A day of personal use of a dwelling unit is any day that the unit is used by any of the following persons. 1040ez instructions 2011 You or any other person who has an interest in the unit, unless you rent it to another owner as his or her main home under a shared equity financing agreement (defined later). 1040ez instructions 2011 However, see Days used as a main home before or after renting , later. 1040ez instructions 2011 A member of your family or a member of the family of any other person who owns an interest in the unit, unless the family member uses the dwelling unit as his or her main home and pays a fair rental price. 1040ez instructions 2011 Family includes only your spouse, brothers and sisters, half-brothers and half-sisters, ancestors (parents, grandparents, etc. 1040ez instructions 2011 ), and lineal descendants (children, grandchildren, etc. 1040ez instructions 2011 ). 1040ez instructions 2011 Anyone under an arrangement that lets you use some other dwelling unit. 1040ez instructions 2011 Anyone at less than a fair rental price. 1040ez instructions 2011 Main home. 1040ez instructions 2011   If the other person or member of the family in (1) or (2) above has more than one home, his or her main home is ordinarily the one he or she lived in most of the time. 1040ez instructions 2011 Shared equity financing agreement. 1040ez instructions 2011   This is an agreement under which two or more persons acquire undivided interests for more than 50 years in an entire dwelling unit, including the land, and one or more of the co-owners is entitled to occupy the unit as his or her main home upon payment of rent to the other co-owner or owners. 1040ez instructions 2011 Donation of use of property. 1040ez instructions 2011   You use a dwelling unit for personal purposes if: You donate the use of the unit to a charitable organization, The organization sells the use of the unit at a fund-raising event, and The “purchaser” uses the unit. 1040ez instructions 2011 Examples. 1040ez instructions 2011   The following examples show how to determine days of personal use. 1040ez instructions 2011 Example 1. 1040ez instructions 2011 You and your neighbor are co-owners of a condominium at the beach. 1040ez instructions 2011 Last year, you rented the unit to vacationers whenever possible. 1040ez instructions 2011 The unit was not used as a main home by anyone. 1040ez instructions 2011 Your neighbor used the unit for 2 weeks last year; you did not use it at all. 1040ez instructions 2011 Because your neighbor has an interest in the unit, both of you are considered to have used the unit for personal purposes during those 2 weeks. 1040ez instructions 2011 Example 2. 1040ez instructions 2011 You and your neighbors are co-owners of a house under a shared equity financing agreement. 1040ez instructions 2011 Your neighbors live in the house and pay you a fair rental price. 1040ez instructions 2011 Even though your neighbors have an interest in the house, the days your neighbors live there are not counted as days of personal use by you. 1040ez instructions 2011 This is because your neighbors rent the house as their main home under a shared equity financing agreement. 1040ez instructions 2011 Example 3. 1040ez instructions 2011 You own a rental property that you rent to your son. 1040ez instructions 2011 Your son does not own any interest in this property. 1040ez instructions 2011 He uses it as his main home and pays you a fair rental price. 1040ez instructions 2011 Your son's use of the property is not personal use by you because your son is using it as his main home, he owns no interest in the property, and he is paying you a fair rental price. 1040ez instructions 2011 Example 4. 1040ez instructions 2011 You rent your beach house to Joshua. 1040ez instructions 2011 Joshua rents his cabin in the mountains to you. 1040ez instructions 2011 You each pay a fair rental price. 1040ez instructions 2011 You are using your house for personal purposes on the days that Joshua uses it because your house is used by Joshua under an arrangement that allows you to use his house. 1040ez instructions 2011 Days used for repairs and maintenance. 1040ez instructions 2011   Any day that you spend working substantially full time repairing and maintaining (not improving) your property is not counted as a day of personal use. 1040ez instructions 2011 Do not count such a day as a day of personal use even if family members use the property for recreational purposes on the same day. 1040ez instructions 2011 Days used as a main home before or after renting. 1040ez instructions 2011   For purposes of determining whether a dwelling unit was used as a home, you may not have to count days you used the property as your main home before or after renting it or offering it for rent as days of personal use. 1040ez instructions 2011 Do not count them as days of personal use if: You rented or tried to rent the property for 12 or more consecutive months. 1040ez instructions 2011 You rented or tried to rent the property for a period of less than 12 consecutive months and the period ended because you sold or exchanged the property. 1040ez instructions 2011 However, this special rule does not apply when dividing expenses between rental and personal use. 1040ez instructions 2011 Examples. 1040ez instructions 2011   The following examples show how to determine whether you used your rental property as a home. 1040ez instructions 2011 Example 1. 1040ez instructions 2011 You converted the basement of your home into an apartment with a bedroom, a bathroom, and a small kitchen. 1040ez instructions 2011 You rented the basement apartment at a fair rental price to college students during the regular school year. 1040ez instructions 2011 You rented to them on a 9-month lease (273 days). 1040ez instructions 2011 You figured 10% of the total days rented to others at a fair rental price is 27 days. 1040ez instructions 2011 During June (30 days), your brothers stayed with you and lived in the basement apartment rent free. 1040ez instructions 2011 Your basement apartment was used as a home because you used it for personal purposes for 30 days. 1040ez instructions 2011 Rent-free use by your brothers is considered personal use. 1040ez instructions 2011 Your personal use (30 days) is more than the greater of 14 days or 10% of the total days it was rented (27 days). 1040ez instructions 2011 Example 2. 1040ez instructions 2011 You rented the guest bedroom in your home at a fair rental price during the local college's homecoming, commencement, and football weekends (a total of 27 days). 1040ez instructions 2011 Your sister-in-law stayed in the room, rent free, for the last 3 weeks (21 days) in July. 1040ez instructions 2011 You figured 10% of the total days rented to others at a fair rental price is 3 days. 1040ez instructions 2011 The room was used as a home because you used it for personal purposes for 21 days. 1040ez instructions 2011 That is more than the greater of 14 days or 10% of the 27 days it was rented (3 days). 1040ez instructions 2011 Example 3. 1040ez instructions 2011 You own a condominium apartment in a resort area. 1040ez instructions 2011 You rented it at a fair rental price for a total of 170 days during the year. 1040ez instructions 2011 For 12 of those days, the tenant was not able to use the apartment and allowed you to use it even though you did not refund any of the rent. 1040ez instructions 2011 Your family actually used the apartment for 10 of those days. 1040ez instructions 2011 Therefore, the apartment is treated as having been rented for 160 (170 − 10) days. 1040ez instructions 2011 You figured 10% of the total days rented to others at a fair rental price is 16 days. 1040ez instructions 2011 Your family also used the apartment for 7 other days during the year. 1040ez instructions 2011 You used the apartment as a home because you used it for personal purposes for 17 days. 1040ez instructions 2011 That is more than the greater of 14 days or 10% of the 160 days it was rented (16 days). 1040ez instructions 2011 Minimal rental use. 1040ez instructions 2011   If you use the dwelling unit as a home and you rent it less than 15 days during the year, that period is not treated as rental activity. 1040ez instructions 2011 See Used as a home but rented less than 15 days , later, for more information. 1040ez instructions 2011 Limit on deductions. 1040ez instructions 2011   Renting a dwelling unit that is considered a home is not a passive activity. 1040ez instructions 2011 Instead, if your rental expenses are more than your rental income, some or all of the excess expenses cannot be used to offset income from other sources. 1040ez instructions 2011 The excess expenses that cannot be used to offset income from other sources are carried forward to the next year and treated as rental expenses for the same property. 1040ez instructions 2011 Any expenses carried forward to the next year will be subject to any limits that apply for that year. 1040ez instructions 2011 This limitation will apply to expenses carried forward to another year even if you do not use the property as your home for that subsequent year. 1040ez instructions 2011   To figure your deductible rental expenses for this year and any carryover to next year, use Worksheet 9-1. 1040ez instructions 2011 Reporting Income and Deductions Property not used for personal purposes. 1040ez instructions 2011   If you do not use a dwelling unit for personal purposes, see How To Report Rental Income and Expenses , later, for how to report your rental income and expenses. 1040ez instructions 2011 Property used for personal purposes. 1040ez instructions 2011   If you do use a dwelling unit for personal purposes, then how you report your rental income and expenses depends on whether you used the dwelling unit as a home. 1040ez instructions 2011 Not used as a home. 1040ez instructions 2011   If you use a dwelling unit for personal purposes, but not as a home, report all the rental income in your income. 1040ez instructions 2011 Since you used the dwelling unit for personal purposes, you must divide your expenses between the rental use and the personal use as described earlier in Dividing Expenses . 1040ez instructions 2011 The expenses for personal use are not deductible as rental expenses. 1040ez instructions 2011   Your deductible rental expenses can be more than your gross rental income; however, see Limits on Rental Losses , later. 1040ez instructions 2011 Used as a home but rented less than 15 days. 1040ez instructions 2011   If you use a dwelling unit as a home and you rent it less than 15 days during the year, its primary function is not considered to be rental and it should not be reported on Schedule E (Form 1040). 1040ez instructions 2011 You are not required to report the rental income and rental expenses from this activity. 1040ez instructions 2011 The expenses, including qualified mortgage interest, property taxes, and any qualified casualty loss will be reported as normally allowed on Schedule A (Form 1040). 1040ez instructions 2011 See the Instructions for Schedule A (Form 1040) for more information on deducting these expenses. 1040ez instructions 2011 Used as a home and rented 15 days or more. 1040ez instructions 2011   If you use a dwelling unit as a home and rent it 15 days or more during the year, include all your rental income in your income. 1040ez instructions 2011 Since you used the dwelling unit for personal purposes, you must divide your expenses between the rental use and the personal use as described earlier in Dividing Expenses . 1040ez instructions 2011 The expenses for personal use are not deductible as rental expenses. 1040ez instructions 2011   If you had a net profit from renting the dwelling unit for the year (that is, if your rental income is more than the total of your rental expenses, including depreciation), deduct all of your rental expenses. 1040ez instructions 2011 You do not need to use Worksheet 9-1. 1040ez instructions 2011   However, if you had a net loss from renting the dwelling unit for the year, your deduction for certain rental expenses is limited. 1040ez instructions 2011 To figure your deductible rental expenses and any carryover to next year, use Worksheet 9-1. 1040ez instructions 2011 Depreciation You recover the cost of income-producing property through yearly tax deductions. 1040ez instructions 2011 You do this by depreciating the property; that is, by deducting some of the cost each year on your tax return. 1040ez instructions 2011 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. 1040ez instructions 2011 You cannot simply deduct your mortgage or principal payments, or the cost of furniture, fixtures, and equipment, as an expense. 1040ez instructions 2011 You can deduct depreciation only on the part of your property used for rental purposes. 1040ez instructions 2011 Depreciation reduces your basis for figuring gain or loss on a later sale or exchange. 1040ez instructions 2011 You may have to use Form 4562 to figure and report your depreciation. 1040ez instructions 2011 See How To Report Rental Income and Expenses , later. 1040ez instructions 2011 Alternative minimum tax (AMT). 1040ez instructions 2011    If you use accelerated depreciation, you may be subject to the AMT. 1040ez instructions 2011 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). 1040ez instructions 2011 Claiming the correct amount of depreciation. 1040ez instructions 2011   You should claim the correct amount of depreciation each tax year. 1040ez instructions 2011 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. 1040ez instructions 2011   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. 1040ez instructions 2011 S Individual Income Tax Return. 1040ez instructions 2011 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. 1040ez instructions 2011 See Claiming the correct amount of depreciation in chapter 2 of Publication 527 for more information. 1040ez instructions 2011 Changing your accounting method to deduct unclaimed depreciation. 1040ez instructions 2011   To change your accounting method, you generally must file Form 3115, Application for Change in Accounting Method, to get the consent of the IRS. 1040ez instructions 2011 In some instances, that consent is automatic. 1040ez instructions 2011 For more information, see chapter 1 of Publication 946. 1040ez instructions 2011 Land. 1040ez instructions 2011   You cannot depreciate the cost of land because land generally does not wear out, become obsolete, or get used up. 1040ez instructions 2011 The costs of clearing, grading, planting, and landscaping are usually all part of the cost of land and cannot be depreciated. 1040ez instructions 2011 More information. 1040ez instructions 2011   See Publication 527 for more information about depreciating rental property and see Publication 946 for more information about depreciation. 1040ez instructions 2011 Limits on Rental Losses If you have a loss from your rental real estate activity, two sets of rules may limit the amount of loss you can deduct. 1040ez instructions 2011 You must consider these rules in the order shown below. 1040ez instructions 2011 At-risk rules. 1040ez instructions 2011 These rules are applied first if there is investment in your rental real estate activity for which you are not at risk. 1040ez instructions 2011 This applies only if the real property was placed in service after 1986. 1040ez instructions 2011 Passive activity limits. 1040ez instructions 2011 Generally, rental real estate activities are considered passive activities and losses are not deductible unless you have income from other passive activities to offset them. 1040ez instructions 2011 However, there are exceptions. 1040ez instructions 2011 At-Risk Rules You may be subject to the at-risk rules if you have: A loss from an activity carried on as a trade or business or for the production of income, and Amounts invested in the activity for which you are not fully at risk. 1040ez instructions 2011 Losses from holding real property (other than mineral property) placed in service before 1987 are not subject to the at-risk rules. 1040ez instructions 2011 In most cases, any loss from an activity subject to the at-risk rules is allowed only to the extent of the total amount you have at risk in the activity at the end of the tax year. 1040ez instructions 2011 You are considered at risk in an activity to the extent of cash and the adjusted basis of other property you contributed to the activity and certain amounts borrowed for use in the activity. 1040ez instructions 2011 See Publication 925 for more information. 1040ez instructions 2011 Passive Activity Limits In most cases, all rental real estate activities (except those of certain real estate professionals, discussed later) are passive activities. 1040ez instructions 2011 For this purpose, a rental activity is an activity from which you receive income mainly for the use of tangible property, rather than for services. 1040ez instructions 2011 Limits on passive activity deductions and credits. 1040ez instructions 2011    Deductions or losses from passive activities are limited. 1040ez instructions 2011 You generally cannot offset income, other than passive income, with losses from passive activities. 1040ez instructions 2011 Nor can you offset taxes on income, other than passive income, with credits resulting from passive activities. 1040ez instructions 2011 Any excess loss or credit is carried forward to the next tax year. 1040ez instructions 2011   For a detailed discussion of these rules, see Publication 925. 1040ez instructions 2011    You may have to complete Form 8582 to figure the amount of any passive activity loss for the current tax year for all activities and the amount of the passive activity loss allowed on your tax return. 1040ez instructions 2011 Real estate professionals. 1040ez instructions 2011   Rental activities in which you materially participated during the year are not passive activities if, for that year, you were a real estate professional. 1040ez instructions 2011 For a detailed discussion of the requirements, see Publication 527. 1040ez instructions 2011 For a detailed discussion of material participation, see Publication 925. 1040ez instructions 2011 Exception for Personal Use of Dwelling Unit If you used the rental property as a home during the year, any income, deductions, gain, or loss allocable to such use shall not be taken into account for purposes of the passive activity loss limitation. 1040ez instructions 2011 Instead, follow the rules explained in Personal Use of Dwelling Unit (Including Vacation Home), earlier. 1040ez instructions 2011 Exception for Rental Real Estate Activities With Active Participation If you or your spouse actively participated in a passive rental real estate activity, you may be able to deduct up to $25,000 of loss from the activity from your nonpassive income. 1040ez instructions 2011 This special allowance is an exception to the general rule disallowing losses in excess of income from passive activities. 1040ez instructions 2011 Similarly, you may be able to offset credits from the activity against the tax on up to $25,000 of nonpassive income after taking into account any losses allowed under this exception. 1040ez instructions 2011 Active participation. 1040ez instructions 2011   You actively participated in a rental real estate activity if you (and your spouse) owned at least 10% of the rental property and you made management decisions or arranged for others to provide services (such as repairs) in a significant and bona fide sense. 1040ez instructions 2011 Management decisions that may count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and similar decisions. 1040ez instructions 2011 Maximum special allowance. 1040ez instructions 2011   The maximum special allowance is: $25,000 for single individuals and married individuals filing a joint return for the tax year, $12,500 for married individuals who file separate returns for the tax year and lived apart from their spouses at all times during the tax year, and $25,000 for a qualifying estate reduced by the special allowance for which the surviving spouse qualified. 1040ez instructions 2011   If your modified adjusted gross income (MAGI) is $100,000 or less ($50,000 or less if married filing separately), you can deduct your loss up to the amount specified above. 1040ez instructions 2011 If your MAGI is more than $100,000 (more than $50,000 if married filing separately), your special allowance is limited to 50% of the difference between $150,000 ($75,000 if married filing separately) and your MAGI. 1040ez instructions 2011   Generally, if your MAGI is $150,000 or more ($75,000 or more if you are married filing separately), there is no special allowance. 1040ez instructions 2011 More information. 1040ez instructions 2011   See Publication 925 for more information on the passive loss limits, including information on the treatment of unused disallowed passive losses and credits and the treatment of gains and losses realized on the disposition of a passive activity. 1040ez instructions 2011 How To Report Rental Income and Expenses The basic form for reporting residential rental income and expenses is Schedule E (Form 1040). 1040ez instructions 2011 However, do not use that schedule to report a not-for-profit activity. 1040ez instructions 2011 See Not Rented for Profit, earlier. 1040ez instructions 2011 Providing substantial services. 1040ez instructions 2011   If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, report your rental income and expenses on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business (Sole Proprietorship). 1040ez instructions 2011 Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc. 1040ez instructions 2011 For information, see Publication 334, Tax Guide for Small Business. 1040ez instructions 2011 You also may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. 1040ez instructions 2011   Use Form 1065, U. 1040ez instructions 2011 S. 1040ez instructions 2011 Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). 1040ez instructions 2011 Qualified joint venture. 1040ez instructions 2011   If you and your spouse each materially participate as the only members of a jointly owned and operated real estate business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership. 1040ez instructions 2011 This election, in most cases, will not increase the total tax owed on the joint return, but it does give each of you credit for social security earnings on which retirement benefits are based and for Medicare coverage if your rental income is subject to self-employment tax. 1040ez instructions 2011 For more information, see Publication 527. 1040ez instructions 2011 Form 1098, Mortgage Interest Statement. 1040ez instructions 2011    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. 1040ez instructions 2011 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. 1040ez instructions 2011 Attach a statement to your return showing the name and address of the other person. 1040ez instructions 2011 In the left margin of Schedule E, next to line 13, enter “See attached. 1040ez instructions 2011 ” Schedule E (Form 1040) If you rent buildings, rooms, or apartments, and provide basic services such as heat and light, trash collection, etc. 1040ez instructions 2011 , you normally report your rental income and expenses on Schedule E, Part I. 1040ez instructions 2011 List your total income, expenses, and depreciation for each rental property. 1040ez instructions 2011 Be sure to enter the number of fair rental and personal use days on line 2. 1040ez instructions 2011 If you have more than three rental or royalty properties, complete and attach as many Schedules E as are needed to list the properties. 1040ez instructions 2011 Complete lines 1 and 2 for each property. 1040ez instructions 2011 However, fill in lines 23a through 26 on only one Schedule E. 1040ez instructions 2011 On Schedule E, page 1, line 18, enter the depreciation you are claiming for each property. 1040ez instructions 2011 To find out if you need to attach Form 4562, see Form 4562, in chapter 3 of Publication 527. 1040ez instructions 2011 If you have a loss from your rental real estate activity, you also may need to complete one or both of the following forms. 1040ez instructions 2011 Form 6198, At-Risk Limitations. 1040ez instructions 2011 See At-Risk Rules , earlier. 1040ez instructions 2011 Also see Publication 925. 1040ez instructions 2011 Form 8582, Passive Activity Loss Limitations. 1040ez instructions 2011 See Passive Activity Limits , earlier. 1040ez instructions 2011 Page 2 of Schedule E is used to report income or loss from partnerships, S corporations, estates, trusts, and real estate mortgage investment conduits. 1040ez instructions 2011 If you need to use page 2 of Schedule E, be sure to use page 2 of the same Schedule E you used to enter your rental activity on page 1. 1040ez instructions 2011 Also, include the amount from line 26 (Part I) in the “Total income or (loss)” on line 41 (Part V). 1040ez instructions 2011 Worksheet 9-1. 1040ez instructions 2011 Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Use this worksheet only if you answer “yes” to all of the following questions. 1040ez instructions 2011 Did you use the dwelling unit as a home this year? (See Dwelling Unit Used as a Home . 1040ez instructions 2011 ) Did you rent the dwelling unit at a fair rental price 15 days or more this year? Is the total of your rental expenses and depreciation more than your rental income? PART I. 1040ez instructions 2011 Rental Use Percentage A. 1040ez instructions 2011 Total days available for rent at fair rental price A. 1040ez instructions 2011       B. 1040ez instructions 2011 Total days available for rent (line A) but not rented B. 1040ez instructions 2011       C. 1040ez instructions 2011 Total days of rental use. 1040ez instructions 2011 Subtract line B from line A C. 1040ez instructions 2011       D. 1040ez instructions 2011 Total days of personal use (including days rented at less than fair rental price) D. 1040ez instructions 2011       E. 1040ez instructions 2011 Total days of rental and personal use. 1040ez instructions 2011 Add lines C and D E. 1040ez instructions 2011       F. 1040ez instructions 2011 Percentage of expenses allowed for rental. 1040ez instructions 2011 Divide line C by line E     F. 1040ez instructions 2011   PART II. 1040ez instructions 2011 Allowable Rental Expenses 1. 1040ez instructions 2011 Enter rents received 1. 1040ez instructions 2011   2a. 1040ez instructions 2011 Enter the rental portion of deductible home mortgage interest and qualified mortgage insurance premiums (see instructions) 2a. 1040ez instructions 2011       b. 1040ez instructions 2011 Enter the rental portion of real estate taxes b. 1040ez instructions 2011       c. 1040ez instructions 2011 Enter the rental portion of deductible casualty and theft losses (see instructions) c. 1040ez instructions 2011       d. 1040ez instructions 2011 Enter direct rental expenses (see instructions) d. 1040ez instructions 2011       e. 1040ez instructions 2011 Fully deductible rental expenses. 1040ez instructions 2011 Add lines 2a–2d. 1040ez instructions 2011 Enter here and  on the appropriate lines on Schedule E (see instructions) 2e. 1040ez instructions 2011   3. 1040ez instructions 2011 Subtract line 2e from line 1. 1040ez instructions 2011 If zero or less, enter -0- 3. 1040ez instructions 2011   4a. 1040ez instructions 2011 Enter the rental portion of expenses directly related to operating or maintaining  the dwelling unit (such as repairs, insurance, and utilities) 4a. 1040ez instructions 2011       b. 1040ez instructions 2011 Enter the rental portion of excess mortgage interest and qualified mortgage insurance premiums (see instructions) b. 1040ez instructions 2011       c. 1040ez instructions 2011 Carryover of operating expenses from 2012 worksheet c. 1040ez instructions 2011       d. 1040ez instructions 2011 Add lines 4a–4c d. 1040ez instructions 2011       e. 1040ez instructions 2011 Allowable expenses. 1040ez instructions 2011 Enter the smaller of line 3 or line 4d (see instructions) 4e. 1040ez instructions 2011   5. 1040ez instructions 2011 Subtract line 4e from line 3. 1040ez instructions 2011 If zero or less, enter -0- 5. 1040ez instructions 2011   6a. 1040ez instructions 2011 Enter the rental portion of excess casualty and theft losses (see instructions) 6a. 1040ez instructions 2011       b. 1040ez instructions 2011 Enter the rental portion of depreciation of the dwelling unit b. 1040ez instructions 2011       c. 1040ez instructions 2011 Carryover of excess casualty losses and depreciation from 2012 worksheet c. 1040ez instructions 2011       d. 1040ez instructions 2011 Add lines 6a–6c d. 1040ez instructions 2011       e. 1040ez instructions 2011 Allowable excess casualty and theft losses and depreciation. 1040ez instructions 2011 Enter the smaller of  line 5 or line 6d (see instructions) 6e. 1040ez instructions 2011   PART III. 1040ez instructions 2011 Carryover of Unallowed Expenses to Next Year 7a. 1040ez instructions 2011 Operating expenses to be carried over to next year. 1040ez instructions 2011 Subtract line 4e from line 4d 7a. 1040ez instructions 2011   b. 1040ez instructions 2011 Excess casualty and theft losses and depreciation to be carried over to next year. 1040ez instructions 2011  Subtract line 6e from line 6d b. 1040ez instructions 2011   Worksheet 9-1 Instructions. 1040ez instructions 2011 Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Caution. 1040ez instructions 2011 Use the percentage determined in Part I, line F, to figure the rental portions to enter on lines 2a–2c, 4a–4b, and 6a–6b of  Part II. 1040ez instructions 2011 Line 2a. 1040ez instructions 2011 Figure the mortgage interest on the dwelling unit that you could deduct on Schedule A as if you had not rented the unit. 1040ez instructions 2011 Do not include interest on a loan that did not benefit the dwelling unit. 1040ez instructions 2011 For example, do not include interest on a home equity loan used to pay off credit cards or other personal loans, buy a car, or pay college tuition. 1040ez instructions 2011 Include interest on a loan used to buy, build, or improve the dwelling unit, or to refinance such a loan. 1040ez instructions 2011 Include the rental portion of this interest in the total you enter on line 2a of the worksheet. 1040ez instructions 2011   Figure the qualified mortgage insurance premiums on the dwelling unit that you could deduct on line 13 of Schedule A as if you had not rented the unit. 1040ez instructions 2011 See the Schedule A instructions. 1040ez instructions 2011 However, figure your adjusted gross income (Form 1040, line 38) without your rental income and expenses from the dwelling unit. 1040ez instructions 2011 See Line 4b to deduct the part of the qualified mortgage insurance premiums not allowed because of the adjusted gross income limit. 1040ez instructions 2011 Include the rental portion of the amount from Schedule A, line 13, in the total you enter on line 2a of the worksheet. 1040ez instructions 2011   Note. 1040ez instructions 2011 Do not file this Schedule A or use it to figure the amount to deduct on line 13 of that schedule. 1040ez instructions 2011 Instead, figure the personal portion on a separate Schedule A. 1040ez instructions 2011 If you have deducted mortgage interest or qualified mortgage insurance premiums on the dwelling unit on other forms, such as Schedule C or F, remember to reduce your Schedule A deduction by that amount. 1040ez instructions 2011           Line 2c. 1040ez instructions 2011 Figure the casualty and theft losses related to the dwelling unit that you could deduct on Schedule A as if you had not rented the dwelling unit. 1040ez instructions 2011 To do this, complete Section A of Form 4684, Casualties and Thefts, treating the losses as personal losses. 1040ez instructions 2011 If any of the loss is due to a federally declared disaster, see the Instructions for Form 4684. 1040ez instructions 2011 On Form 4684, line 17, enter 10% of your adjusted gross income figured without your rental income and expenses from the dwelling unit. 1040ez instructions 2011 Enter the rental portion of the result from Form 4684, line 18, on line 2c of this worksheet. 1040ez instructions 2011   Note. 1040ez instructions 2011 Do not file this Form 4684 or use it to figure your personal losses on Schedule A. 1040ez instructions 2011 Instead, figure the personal portion on a separate Form 4684. 1040ez instructions 2011           Line 2d. 1040ez instructions 2011 Enter the total of your rental expenses that are directly related only to the rental activity. 1040ez instructions 2011 These include interest on loans used for rental activities other than to buy, build, or improve the dwelling unit. 1040ez instructions 2011 Also include rental agency fees, advertising, office supplies, and depreciation on office equipment used in your rental activity. 1040ez instructions 2011           Line 2e. 1040ez instructions 2011 You can deduct the amounts on lines 2a, 2b, 2c, and 2d as rental expenses on Schedule E even if your rental expenses are more than your rental income. 1040ez instructions 2011 Enter the amounts on lines 2a, 2b, 2c, and 2d on the appropriate lines of Schedule E. 1040ez instructions 2011           Line 4b. 1040ez instructions 2011 On line 2a, you entered the rental portion of the mortgage interest and qualified mortgage insurance premiums you could deduct on Schedule A if you had not rented the dwelling unit. 1040ez instructions 2011 If you had additional mortgage interest and qualified mortgage insurance premiums that would not be deductible on Schedule A because of limits imposed on them, enter on line 4b of this worksheet the rental portion of those excess amounts. 1040ez instructions 2011 Do not include interest on a loan that did not benefit the dwelling unit (as explained in the line 2a instructions). 1040ez instructions 2011           Line 4e. 1040ez instructions 2011 You can deduct the amounts on lines 4a, 4b, and 4c as rental expenses on Schedule E only to the extent they are not more than the amount on line 4e. 1040ez instructions 2011 *           Line 6a. 1040ez instructions 2011 To find the rental portion of excess casualty and theft losses, use the Form 4684 you prepared for line 2c of this worksheet. 1040ez instructions 2011   A. 1040ez instructions 2011 Enter the amount from Form 4684, line 10       B. 1040ez instructions 2011 Enter the rental portion of line A       C. 1040ez instructions 2011 Enter the amount from line 2c of this worksheet       D. 1040ez instructions 2011 Subtract line C from line B. 1040ez instructions 2011 Enter the result here and on line 6a of this worksheet               Line 6e. 1040ez instructions 2011 You can deduct the amounts on lines 6a, 6b, and 6c as rental expenses on Schedule E only to the extent they are not more than the amount on line 6e. 1040ez instructions 2011 * *Allocating the limited deduction. 1040ez instructions 2011 If you cannot deduct all of the amount on line 4d or 6d this year, you can allocate the allowable deduction in any way you wish among the expenses included on line 4d or 6d. 1040ez instructions 2011 Enter the amount you allocate to each expense on the appropriate line of Schedule E, Part I. 1040ez instructions 2011 Prev  Up  Next   Home   More Online 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Contact My Local Office in Vermont

Face-to-face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

City  Street Address  Days/Hours of Service  Telephone* 
Brattleboro  1222 Putney Rd.
Brattleboro, VT 05301 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 1:00 p.m. - 2:00 p.m.)

 

**This office will close at 3:00 p.m. on 4/3**

 

Services Provided

(802) 257-4825 
Burlington  128 Lakeside Ave., Innovation Center, 2nd Floor
Burlington, VT 05401 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 1:00 p.m. - 2:00 p.m.)


Services Provided

(802) 859-9308 
Montpelier  87 State St.
Montpelier, VT 05602 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
(Closed for lunch 1:00 p.m.-2:00 p.m.)

 

**This office will close on Mondays at 3:00 p.m. from 1/6 through 3/31**

 

Services Provided

(802) 223-7871 
Rutland  1085 U.S. Route 4 East
Rutland, VT 05701 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 1:00 p.m.-2:00 p.m.)

 

**This office will be closed 3/26**

 

**This office will be closed 4/18**

 

Services Provided

(802) 773-6982 

* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).

For information on where to file your tax return please see Where to File Addresses.

The Taxpayer Advocate Service: Call (802) 859-1052 in Burlington or 1-877-777-4778 elsewhere, or see Publication 1546, The Taxpayer Advocate Service of the IRS. For further information, see Tax Topic 104.

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service SPEC
128 Lakeside Avenue, Suite 204
Burlington,VT 05401

 

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The 1040ez Instructions 2011

1040ez instructions 2011 17. 1040ez instructions 2011   How To Get Tax Help Table of Contents Go online, use a smart phone, call or walk in to an office near you. 1040ez instructions 2011 Whether it's help with a tax issue, preparing your tax return or picking up a free publication or form, get the help you need the way you want it. 1040ez instructions 2011 Free help with your tax return. 1040ez instructions 2011   Free help in preparing your return is available nationwide from IRS-certified volunteers. 1040ez instructions 2011 The Volunteer Income Tax Assistance (VITA) program is designed to help low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers. 1040ez instructions 2011 The Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. 1040ez instructions 2011 Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. 1040ez instructions 2011 Some VITA and TCE sites provide taxpayers the opportunity to prepare their return with the assistance of an IRS-certified volunteer. 1040ez instructions 2011 To find the nearest VITA or TCE site, visit IRS. 1040ez instructions 2011 gov or call 1-800-906-9887. 1040ez instructions 2011   As part of the TCE program, AARP offers the Tax-Aide counseling program. 1040ez instructions 2011 To find the nearest AARP Tax-Aide site, visit AARP's website at www. 1040ez instructions 2011 aarp. 1040ez instructions 2011 org/money/taxaide or call 1-888-227-7669. 1040ez instructions 2011   For more information on these programs, go to IRS. 1040ez instructions 2011 gov and enter “VITA” in the search box. 1040ez instructions 2011 Internet. 1040ez instructions 2011 IRS. 1040ez instructions 2011 gov and IRS2Go are ready when you are — every day, every night, 24 hours a day, 7 days a week. 1040ez instructions 2011 Apply for an Employer Identification Number (EIN). 1040ez instructions 2011 Go to IRS. 1040ez instructions 2011 gov and enter Apply for an EIN in the search box. 1040ez instructions 2011 Request an Electronic Filing PIN by going to IRS. 1040ez instructions 2011 gov and entering Electronic Filing PIN in the search box. 1040ez instructions 2011 Download forms, instructions, and publications, including some accessible versions. 1040ez instructions 2011 Order free transcripts of your tax returns or tax account using the Order a Transcript tool on IRS. 1040ez instructions 2011 gov or IRS2Go. 1040ez instructions 2011 Tax return and tax account transcripts are generally available for the current year and past three years. 1040ez instructions 2011 Locate the nearest Taxpayer Assistance Center using the Office Locator tool on IRS. 1040ez instructions 2011 gov or IRS2Go. 1040ez instructions 2011 Stop by most business days for face-to-face tax help, no appointment necessary — just walk in. 1040ez instructions 2011 An employee can explain IRS letters, request adjustments to your tax account or help you set up a payment plan. 1040ez instructions 2011 Before you visit, check the Office Locator for the address, phone number, hours of operation and the services provided. 1040ez instructions 2011 If you have an ongoing tax account problem or a special need, such as a disability, you can request an appointment. 1040ez instructions 2011 Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. 1040ez instructions 2011 Locate the nearest volunteer help site with the VITA Locator Tool on IRS. 1040ez instructions 2011 gov. 1040ez instructions 2011 Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. 1040ez instructions 2011 The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. 1040ez instructions 2011 Most VITA and TCE sites offer free electronic filing and some provide IRS-certified volunteers who can help prepare your tax return. 1040ez instructions 2011 AARP offers the Tax-Aide counseling program as part of the TCE program. 1040ez instructions 2011 Visit AARP's website to find the nearest Tax-Aide location. 1040ez instructions 2011 Research your tax questions. 1040ez instructions 2011 Search publications and instructions by topic or keyword. 1040ez instructions 2011 Read the Internal Revenue Code, regulations, or other official guidance. 1040ez instructions 2011 Read Internal Revenue Bulletins. 1040ez instructions 2011 Sign up to receive local and national tax news by email. 1040ez instructions 2011 Phone. 1040ez instructions 2011 You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. 1040ez instructions 2011   Call the Business and Specialty Tax line for questions at 1-800-829-4933. 1040ez instructions 2011 Download the free IRS2Go mobile app from the iTunes app store or from Google Play. 1040ez instructions 2011 Use it to watch the IRS YouTube channel, get IRS news as soon as it's released to the public, order transcripts of your tax returns or tax account, check your refund status, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. 1040ez instructions 2011 Call to locate the nearest volunteer help site, 1-800-906-9887. 1040ez instructions 2011 Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. 1040ez instructions 2011 The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. 1040ez instructions 2011 Most VITA and TCE sites offer free electronic filing. 1040ez instructions 2011 Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. 1040ez instructions 2011 Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. 1040ez instructions 2011 Call to order forms, instructions and publications, 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions and publications, and prior-year forms and instructions (limited to 5 years). 1040ez instructions 2011 You should receive your order within 10 business days. 1040ez instructions 2011 Call to order transcripts of your tax returns or tax account, 1-800-908-9946. 1040ez instructions 2011 Follow the prompts to provide your Employer Identification Number, street address and ZIP code. 1040ez instructions 2011 Call for TeleTax topics, 1-800-829-4477, to listen to pre-recorded messages covering various tax topics. 1040ez instructions 2011 Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. 1040ez instructions 2011 The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. 1040ez instructions 2011 These individuals can also contact the IRS through relay services such as the Federal Relay Service available at www. 1040ez instructions 2011 gsa. 1040ez instructions 2011 gov/fedrelay. 1040ez instructions 2011 Walk-in. 1040ez instructions 2011 You can find a selection of forms, publications and services — in-person, face-to-face. 1040ez instructions 2011   Products. 1040ez instructions 2011 You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. 1040ez instructions 2011 Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. 1040ez instructions 2011 Services. 1040ez instructions 2011 You can walk in to your local TAC most business days for personal, face-to-face tax help. 1040ez instructions 2011 An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. 1040ez instructions 2011 If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local TAC where you can talk with an IRS representative face-to-face. 1040ez instructions 2011 No appointment is necessary—just walk in. 1040ez instructions 2011 Before visiting, check www. 1040ez instructions 2011 irs. 1040ez instructions 2011 gov/localcontacts for hours of operation and services provided. 1040ez instructions 2011 Mail. 1040ez instructions 2011 You can send your order for forms, instructions, and publications to the address below. 1040ez instructions 2011 You should receive a response within 10 days after your request is received. 1040ez instructions 2011  Internal Revenue Service 1201 N. 1040ez instructions 2011 Mitsubishi Motorway Bloomington, IL 61705-6613 The Taxpayer Advocate Service Is Here to Help You. 1040ez instructions 2011   The Taxpayer Advocate Service (TAS) is your voice at the IRS. 1040ez instructions 2011 Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. 1040ez instructions 2011 What can TAS do for you?   We can offer you free help with IRS problems that you can't resolve on your own. 1040ez instructions 2011 We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. 1040ez instructions 2011 You face (or your business is facing) an immediate threat of adverse action. 1040ez instructions 2011 You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. 1040ez instructions 2011   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. 1040ez instructions 2011 Here's why we can help: TAS is an independent organization within the IRS. 1040ez instructions 2011 Our advocates know how to work with the IRS. 1040ez instructions 2011 Our services are free and tailored to meet your needs. 1040ez instructions 2011 We have offices in every state, the District of Columbia, and Puerto Rico. 1040ez instructions 2011 How can you reach us?   If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. 1040ez instructions 2011 irs. 1040ez instructions 2011 gov/advocate, or call us toll-free at 1-877-777-4778. 1040ez instructions 2011 How else does TAS help taxpayers?   TAS also works to resolve large-scale, systemic problems that affect many taxpayers. 1040ez instructions 2011 If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. 1040ez instructions 2011 irs. 1040ez instructions 2011 gov/sams. 1040ez instructions 2011 Low Income Taxpayer Clinics. 1040ez instructions 2011   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. 1040ez instructions 2011 Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. 1040ez instructions 2011 Visit www. 1040ez instructions 2011 TaxpayerAdvocate. 1040ez instructions 2011 irs. 1040ez instructions 2011 gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. 1040ez instructions 2011 Small Business and Self-Employed Tax Center. 1040ez instructions 2011 This online guide is a must for every small business owner or any taxpayer about to start a business. 1040ez instructions 2011  The information is updated during the year. 1040ez instructions 2011 Visit www. 1040ez instructions 2011 irs. 1040ez instructions 2011 gov/Businesses/Small-Businesses-&-Self-Employed. 1040ez instructions 2011 Prev  Up  Next   Home   More Online Publications