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File an amendment 9. File an amendment   Rental Income and Expenses Table of Contents Introduction Useful Items - You may want to see: Rental Income Rental ExpensesVacant while listed for sale. File an amendment 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. File an amendment Dividing Expenses Dwelling Unit Used as a Home Reporting Income and Deductions DepreciationChanging your accounting method to deduct unclaimed depreciation. File an amendment 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. File an amendment It also covers the following topics. File an amendment Personal use of dwelling unit (including vacation home). File an amendment Depreciation. File an amendment Limits on rental losses. File an amendment How to report your rental income and expenses. File an amendment If you sell or otherwise dispose of your rental property, see Publication 544, Sales and Other Dispositions of Assets. File an amendment If you have a loss from damage to, or theft of, rental property, see Publication 547, Casualties, Disasters, and Thefts. File an amendment 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. File an amendment See Publication 527, Residential Rental Property, for more information. File an amendment 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. File an amendment Rental income is any payment you receive for the use or occupation of property. File an amendment In addition to amounts you receive as normal rent payments, there are other amounts that may be rental income. File an amendment When to report. File an amendment   If you are a cash-basis taxpayer, you report rental income on your return for the year you actually or constructively receive it. File an amendment You are a cash-basis taxpayer if you report income in the year you receive it, regardless of when it was earned. File an amendment You constructively receive income when it is made available to you, for example, by being credited to your bank account. File an amendment   For more information about when you constructively receive income, see Accounting Methods in chapter 1. File an amendment Advance rent. File an amendment   Advance rent is any amount you receive before the period that it covers. File an amendment 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. File an amendment Example. File an amendment You sign a 10-year lease to rent your property. File an amendment 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. File an amendment You must include $10,000 in your income in the first year. File an amendment Canceling a lease. File an amendment   If your tenant pays you to cancel a lease, the amount you receive is rent. File an amendment Include the payment in your income in the year you receive it regardless of your method of accounting. File an amendment Expenses paid by tenant. File an amendment   If your tenant pays any of your expenses, the payments are rental income. File an amendment Because you must include this amount in income, you can deduct the expenses if they are deductible rental expenses. File an amendment See Rental Expenses , later, for more information. File an amendment Property or services. File an amendment   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. File an amendment   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. File an amendment Security deposits. File an amendment   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. File an amendment 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. File an amendment   If an amount called a security deposit is to be used as a final payment of rent, it is advance rent. File an amendment Include it in your income when you receive it. File an amendment Part interest. File an amendment   If you own a part interest in rental property, you must report your part of the rental income from the property. File an amendment Rental of property also used as your home. File an amendment   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. File an amendment However, you can deduct on Schedule A (Form 1040) the interest, taxes, and casualty and theft losses that are allowed for nonrental property. File an amendment See Personal Use of Dwelling Unit (Including Vacation Home) , later. File an amendment Rental Expenses This part discusses expenses of renting property that you ordinarily can deduct from your rental income. File an amendment 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. File an amendment Depreciation , which you can also deduct from your rental income, is discussed later. File an amendment Personal use of rental property. File an amendment   If you sometimes use your rental property for personal purposes, you must divide your expenses between rental and personal use. File an amendment Also, your rental expense deductions may be limited. File an amendment See Personal Use of Dwelling Unit (Including Vacation Home) , later. File an amendment Part interest. File an amendment   If you own a part interest in rental property, you can deduct expenses that you paid according to your percentage of ownership. File an amendment When to deduct. File an amendment   If you are a cash-basis taxpayer, you generally deduct your rental expenses in the year you pay them. File an amendment Depreciation. File an amendment   You can begin to depreciate rental property when it is ready and available for rent. File an amendment See Placed-in-Service under When Does Depreciation Begin and End in chapter 2 of Publication 527. File an amendment Pre-rental expenses. File an amendment   You can deduct your ordinary and necessary expenses for managing, conserving, or maintaining rental property from the time you make it available for rent. File an amendment Uncollected rent. File an amendment   If you are a cash-basis taxpayer, do not deduct uncollected rent. File an amendment Because you have not included it in your income, it is not deductible. File an amendment Vacant rental property. File an amendment   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. File an amendment However, you cannot deduct any loss of rental income for the period the property is vacant. File an amendment Vacant while listed for sale. File an amendment   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. File an amendment If the property is not held out and available for rent while listed for sale, the expenses are not deductible rental expenses. File an amendment 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. File an amendment Improvements. File an amendment   You must capitalize any expense you pay to improve your rental property. File an amendment 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. File an amendment Betterments. File an amendment   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. File an amendment Restoration. File an amendment   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. File an amendment Adaptation. File an amendment   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. File an amendment Separate the costs of repairs and improvements, and keep accurate records. File an amendment You will need to know the cost of improvements when you sell or depreciate your property. File an amendment The expenses you capitalize for improving your property can generally be depreciated as if the improvement were separate property. File an amendment 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. File an amendment Insurance premiums paid in advance. File an amendment   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. File an amendment You cannot deduct the total premium in the year you pay it. File an amendment Legal and other professional fees. File an amendment   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. File an amendment For example, on your 2013 Schedule E, you can deduct fees paid in 2013 to prepare your 2012 Schedule E, Part I. File an amendment 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. File an amendment Local benefit taxes. File an amendment   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. File an amendment These charges are nondepreciable capital expenditures, and must be added to the basis of your property. File an amendment However, you can deduct local benefit taxes that are for maintaining, repairing, or paying interest charges for the benefits. File an amendment Local transportation expenses. File an amendment    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. File an amendment 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. File an amendment See Publication 587, Business Use of Your Home, for information on determining if your home office qualifies as a principal place of business. File an amendment   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. File an amendment For 2013, the standard mileage rate for business use is 56. File an amendment 5 cents per mile. File an amendment For more information, see chapter 26. File an amendment    To deduct car expenses under either method, you must keep records that follow the rules in chapter 26. File an amendment In addition, you must complete Form 4562, Part V, and attach it to your tax return. File an amendment Rental of equipment. File an amendment   You can deduct the rent you pay for equipment that you use for rental purposes. File an amendment However, in some cases, lease contracts are actually purchase contracts. File an amendment If so, you cannot deduct these payments. File an amendment You can recover the cost of purchased equipment through depreciation. File an amendment Rental of property. File an amendment   You can deduct the rent you pay for property that you use for rental purposes. File an amendment 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. File an amendment Travel expenses. File an amendment   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. File an amendment You must properly allocate your expenses between rental and nonrental activities. File an amendment You cannot deduct the cost of traveling away from home if the primary purpose of the trip was to improve your property. File an amendment You recover the cost of improvements by taking depreciation. File an amendment For information on travel expenses, see chapter 26. File an amendment    To deduct travel expenses, you must keep records that follow the rules in chapter 26. File an amendment   See Rental Expenses in Publication 527 for more information. File an amendment 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. File an amendment 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. File an amendment You cannot deduct depreciation or insurance for the part of the year the property was held for personal use. File an amendment 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). File an amendment Example. File an amendment Your tax year is the calendar year. File an amendment You moved from your home in May and started renting it out on June 1. File an amendment You can deduct as rental expenses seven-twelfths of your yearly expenses, such as taxes and insurance. File an amendment Starting with June, you can deduct as rental expenses the amounts you pay for items generally billed monthly, such as utilities. File an amendment 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. File an amendment 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). File an amendment 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. File an amendment There is no change in the types of expenses deductible for the personal-use part of your property. File an amendment Generally, these expenses may be deducted only if you itemize your deductions on Schedule A (Form 1040). File an amendment You cannot deduct any part of the cost of the first phone line even if your tenants have unlimited use of it. File an amendment You do not have to divide the expenses that belong only to the rental part of your property. File an amendment 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. File an amendment 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. File an amendment 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. File an amendment How to divide expenses. File an amendment   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. File an amendment You can use any reasonable method for dividing the expense. File an amendment It may be reasonable to divide the cost of some items (for example, water) based on the number of people using them. File an amendment 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. File an amendment 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. File an amendment 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. File an amendment 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. File an amendment Where to report. File an amendment   Report your not-for-profit rental income on Form 1040, line 21. File an amendment 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. File an amendment   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. File an amendment You can deduct these expenses only if they, together with certain other miscellaneous itemized deductions, total more than 2% of your adjusted gross income. File an amendment 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. File an amendment 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. File an amendment Only your rental expenses may be deducted on Schedule E (Form 1040). File an amendment Some of your personal expenses may be deductible if you itemize your deductions on Schedule A (Form 1040). File an amendment You must also determine if the dwelling unit is considered a home. File an amendment The amount of rental expenses that you can deduct may be limited if the dwelling unit is considered a home. File an amendment Whether a dwelling unit is considered a home depends on how many days during the year are considered to be days of personal use. File an amendment 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. File an amendment Dwelling unit. File an amendment   A dwelling unit includes a house, apartment, condominium, mobile home, boat, vacation home, or similar property. File an amendment It also includes all structures or other property belonging to the dwelling unit. File an amendment A dwelling unit has basic living accommodations, such as sleeping space, a toilet, and cooking facilities. File an amendment   A dwelling unit does not include property used solely as a hotel, motel, inn, or similar establishment. File an amendment 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. File an amendment Example. File an amendment   You rent a room in your home that is always available for short-term occupancy by paying customers. File an amendment You do not use the room yourself, and you allow only paying customers to use the room. File an amendment The room is used solely as a hotel, motel, inn, or similar establishment and is not a dwelling unit. File an amendment 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. File an amendment When dividing your expenses, follow these rules. File an amendment 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. File an amendment This rule does not apply when determining whether you used the unit as a home. File an amendment Any day that the unit is available for rent but not actually rented is not a day of rental use. File an amendment Example. File an amendment Your beach cottage was available for rent from June 1 through August 31 (92 days). File an amendment 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. File an amendment 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. File an amendment Your family also used the cottage during the last 2 weeks of May (14 days). File an amendment The cottage was not used at all before May 17 or after August 31. File an amendment You figure the part of the cottage expenses to treat as rental expenses as follows. File an amendment The cottage was used for rental a total of 85 days (92 − 7). File an amendment The days it was available for rent but not rented (7 days) are not days of rental use. File an amendment The July weekend (2 days) you used it is rental use because you received a fair rental price for the weekend. File an amendment You used the cottage for personal purposes for 14 days (the last 2 weeks in May). File an amendment The total use of the cottage was 99 days (14 days personal use + 85 days rental use). File an amendment Your rental expenses are 85/99 (86%) of the cottage expenses. File an amendment Note. File an amendment 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. File an amendment Therefore, you had 16 days of personal use and 83 days of rental use for this purpose. File an amendment 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. File an amendment If you have a net loss, you may not be able to deduct all of the rental expenses. File an amendment See Dwelling Unit Used as a Home, next. File an amendment 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. File an amendment 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. File an amendment See What is a day of personal use , later. File an amendment Fair rental price. File an amendment   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. File an amendment 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. File an amendment   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. File an amendment Instead, count it as a day of personal use in applying both (1) and (2) above. File an amendment 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. File an amendment 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). File an amendment However, see Days used as a main home before or after renting , later. File an amendment 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. File an amendment Family includes only your spouse, brothers and sisters, half-brothers and half-sisters, ancestors (parents, grandparents, etc. File an amendment ), and lineal descendants (children, grandchildren, etc. File an amendment ). File an amendment Anyone under an arrangement that lets you use some other dwelling unit. File an amendment Anyone at less than a fair rental price. File an amendment Main home. File an amendment   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. File an amendment Shared equity financing agreement. File an amendment   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. File an amendment Donation of use of property. File an amendment   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. File an amendment Examples. File an amendment   The following examples show how to determine days of personal use. File an amendment Example 1. File an amendment You and your neighbor are co-owners of a condominium at the beach. File an amendment Last year, you rented the unit to vacationers whenever possible. File an amendment The unit was not used as a main home by anyone. File an amendment Your neighbor used the unit for 2 weeks last year; you did not use it at all. File an amendment 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. File an amendment Example 2. File an amendment You and your neighbors are co-owners of a house under a shared equity financing agreement. File an amendment Your neighbors live in the house and pay you a fair rental price. File an amendment 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. File an amendment This is because your neighbors rent the house as their main home under a shared equity financing agreement. File an amendment Example 3. File an amendment You own a rental property that you rent to your son. File an amendment Your son does not own any interest in this property. File an amendment He uses it as his main home and pays you a fair rental price. File an amendment 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. File an amendment Example 4. File an amendment You rent your beach house to Joshua. File an amendment Joshua rents his cabin in the mountains to you. File an amendment You each pay a fair rental price. File an amendment 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. File an amendment Days used for repairs and maintenance. File an amendment   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. File an amendment 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. File an amendment Days used as a main home before or after renting. File an amendment   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. File an amendment Do not count them as days of personal use if: You rented or tried to rent the property for 12 or more consecutive months. File an amendment 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. File an amendment However, this special rule does not apply when dividing expenses between rental and personal use. File an amendment Examples. File an amendment   The following examples show how to determine whether you used your rental property as a home. File an amendment Example 1. File an amendment You converted the basement of your home into an apartment with a bedroom, a bathroom, and a small kitchen. File an amendment You rented the basement apartment at a fair rental price to college students during the regular school year. File an amendment You rented to them on a 9-month lease (273 days). File an amendment You figured 10% of the total days rented to others at a fair rental price is 27 days. File an amendment During June (30 days), your brothers stayed with you and lived in the basement apartment rent free. File an amendment Your basement apartment was used as a home because you used it for personal purposes for 30 days. File an amendment Rent-free use by your brothers is considered personal use. File an amendment Your personal use (30 days) is more than the greater of 14 days or 10% of the total days it was rented (27 days). File an amendment Example 2. File an amendment 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). File an amendment Your sister-in-law stayed in the room, rent free, for the last 3 weeks (21 days) in July. File an amendment You figured 10% of the total days rented to others at a fair rental price is 3 days. File an amendment The room was used as a home because you used it for personal purposes for 21 days. File an amendment That is more than the greater of 14 days or 10% of the 27 days it was rented (3 days). File an amendment Example 3. File an amendment You own a condominium apartment in a resort area. File an amendment You rented it at a fair rental price for a total of 170 days during the year. File an amendment 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. File an amendment Your family actually used the apartment for 10 of those days. File an amendment Therefore, the apartment is treated as having been rented for 160 (170 − 10) days. File an amendment You figured 10% of the total days rented to others at a fair rental price is 16 days. File an amendment Your family also used the apartment for 7 other days during the year. File an amendment You used the apartment as a home because you used it for personal purposes for 17 days. File an amendment That is more than the greater of 14 days or 10% of the 160 days it was rented (16 days). File an amendment Minimal rental use. File an amendment   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. File an amendment See Used as a home but rented less than 15 days , later, for more information. File an amendment Limit on deductions. File an amendment   Renting a dwelling unit that is considered a home is not a passive activity. File an amendment 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. File an amendment 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. File an amendment Any expenses carried forward to the next year will be subject to any limits that apply for that year. File an amendment 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. File an amendment   To figure your deductible rental expenses for this year and any carryover to next year, use Worksheet 9-1. File an amendment Reporting Income and Deductions Property not used for personal purposes. File an amendment   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. File an amendment Property used for personal purposes. File an amendment   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. File an amendment Not used as a home. File an amendment   If you use a dwelling unit for personal purposes, but not as a home, report all the rental income in your income. File an amendment 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 . File an amendment The expenses for personal use are not deductible as rental expenses. File an amendment   Your deductible rental expenses can be more than your gross rental income; however, see Limits on Rental Losses , later. File an amendment Used as a home but rented less than 15 days. File an amendment   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). File an amendment You are not required to report the rental income and rental expenses from this activity. File an amendment The expenses, including qualified mortgage interest, property taxes, and any qualified casualty loss will be reported as normally allowed on Schedule A (Form 1040). File an amendment See the Instructions for Schedule A (Form 1040) for more information on deducting these expenses. File an amendment Used as a home and rented 15 days or more. File an amendment   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. File an amendment 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 . File an amendment The expenses for personal use are not deductible as rental expenses. File an amendment   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. File an amendment You do not need to use Worksheet 9-1. File an amendment   However, if you had a net loss from renting the dwelling unit for the year, your deduction for certain rental expenses is limited. File an amendment To figure your deductible rental expenses and any carryover to next year, use Worksheet 9-1. File an amendment Depreciation You recover the cost of income-producing property through yearly tax deductions. File an amendment You do this by depreciating the property; that is, by deducting some of the cost each year on your tax return. File an amendment 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. File an amendment You cannot simply deduct your mortgage or principal payments, or the cost of furniture, fixtures, and equipment, as an expense. File an amendment You can deduct depreciation only on the part of your property used for rental purposes. File an amendment Depreciation reduces your basis for figuring gain or loss on a later sale or exchange. File an amendment You may have to use Form 4562 to figure and report your depreciation. File an amendment See How To Report Rental Income and Expenses , later. File an amendment Alternative minimum tax (AMT). File an amendment    If you use accelerated depreciation, you may be subject to the AMT. File an amendment 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). File an amendment Claiming the correct amount of depreciation. File an amendment   You should claim the correct amount of depreciation each tax year. File an amendment 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. File an amendment   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. File an amendment S Individual Income Tax Return. File an amendment 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. File an amendment See Claiming the correct amount of depreciation in chapter 2 of Publication 527 for more information. File an amendment Changing your accounting method to deduct unclaimed depreciation. File an amendment   To change your accounting method, you generally must file Form 3115, Application for Change in Accounting Method, to get the consent of the IRS. File an amendment In some instances, that consent is automatic. File an amendment For more information, see chapter 1 of Publication 946. File an amendment Land. File an amendment   You cannot depreciate the cost of land because land generally does not wear out, become obsolete, or get used up. File an amendment The costs of clearing, grading, planting, and landscaping are usually all part of the cost of land and cannot be depreciated. File an amendment More information. File an amendment   See Publication 527 for more information about depreciating rental property and see Publication 946 for more information about depreciation. File an amendment 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. File an amendment You must consider these rules in the order shown below. File an amendment At-risk rules. File an amendment These rules are applied first if there is investment in your rental real estate activity for which you are not at risk. File an amendment This applies only if the real property was placed in service after 1986. File an amendment Passive activity limits. File an amendment 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. File an amendment However, there are exceptions. File an amendment 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. File an amendment Losses from holding real property (other than mineral property) placed in service before 1987 are not subject to the at-risk rules. File an amendment 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. File an amendment 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. File an amendment See Publication 925 for more information. File an amendment Passive Activity Limits In most cases, all rental real estate activities (except those of certain real estate professionals, discussed later) are passive activities. File an amendment 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. File an amendment Limits on passive activity deductions and credits. File an amendment    Deductions or losses from passive activities are limited. File an amendment You generally cannot offset income, other than passive income, with losses from passive activities. File an amendment Nor can you offset taxes on income, other than passive income, with credits resulting from passive activities. File an amendment Any excess loss or credit is carried forward to the next tax year. File an amendment   For a detailed discussion of these rules, see Publication 925. File an amendment    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. File an amendment Real estate professionals. File an amendment   Rental activities in which you materially participated during the year are not passive activities if, for that year, you were a real estate professional. File an amendment For a detailed discussion of the requirements, see Publication 527. File an amendment For a detailed discussion of material participation, see Publication 925. File an amendment 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. File an amendment Instead, follow the rules explained in Personal Use of Dwelling Unit (Including Vacation Home), earlier. File an amendment 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. File an amendment This special allowance is an exception to the general rule disallowing losses in excess of income from passive activities. File an amendment 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. File an amendment Active participation. File an amendment   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. File an amendment Management decisions that may count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and similar decisions. File an amendment Maximum special allowance. File an amendment   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. File an amendment   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. File an amendment 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. File an amendment   Generally, if your MAGI is $150,000 or more ($75,000 or more if you are married filing separately), there is no special allowance. File an amendment More information. File an amendment   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. File an amendment How To Report Rental Income and Expenses The basic form for reporting residential rental income and expenses is Schedule E (Form 1040). File an amendment However, do not use that schedule to report a not-for-profit activity. File an amendment See Not Rented for Profit, earlier. File an amendment Providing substantial services. File an amendment   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). File an amendment Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc. File an amendment For information, see Publication 334, Tax Guide for Small Business. File an amendment You also may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. File an amendment   Use Form 1065, U. File an amendment S. File an amendment Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). File an amendment Qualified joint venture. File an amendment   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. File an amendment 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. File an amendment For more information, see Publication 527. File an amendment Form 1098, Mortgage Interest Statement. File an amendment    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. File an amendment 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. File an amendment Attach a statement to your return showing the name and address of the other person. File an amendment In the left margin of Schedule E, next to line 13, enter “See attached. File an amendment ” Schedule E (Form 1040) If you rent buildings, rooms, or apartments, and provide basic services such as heat and light, trash collection, etc. File an amendment , you normally report your rental income and expenses on Schedule E, Part I. File an amendment List your total income, expenses, and depreciation for each rental property. File an amendment Be sure to enter the number of fair rental and personal use days on line 2. File an amendment If you have more than three rental or royalty properties, complete and attach as many Schedules E as are needed to list the properties. File an amendment Complete lines 1 and 2 for each property. File an amendment However, fill in lines 23a through 26 on only one Schedule E. File an amendment On Schedule E, page 1, line 18, enter the depreciation you are claiming for each property. File an amendment To find out if you need to attach Form 4562, see Form 4562, in chapter 3 of Publication 527. File an amendment If you have a loss from your rental real estate activity, you also may need to complete one or both of the following forms. File an amendment Form 6198, At-Risk Limitations. File an amendment See At-Risk Rules , earlier. File an amendment Also see Publication 925. File an amendment Form 8582, Passive Activity Loss Limitations. File an amendment See Passive Activity Limits , earlier. File an amendment Page 2 of Schedule E is used to report income or loss from partnerships, S corporations, estates, trusts, and real estate mortgage investment conduits. File an amendment 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. File an amendment Also, include the amount from line 26 (Part I) in the “Total income or (loss)” on line 41 (Part V). File an amendment Worksheet 9-1. File an amendment 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. File an amendment Did you use the dwelling unit as a home this year? (See Dwelling Unit Used as a Home . File an amendment ) 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. File an amendment Rental Use Percentage A. File an amendment Total days available for rent at fair rental price A. File an amendment       B. File an amendment Total days available for rent (line A) but not rented B. File an amendment       C. File an amendment Total days of rental use. File an amendment Subtract line B from line A C. File an amendment       D. File an amendment Total days of personal use (including days rented at less than fair rental price) D. File an amendment       E. File an amendment Total days of rental and personal use. File an amendment Add lines C and D E. File an amendment       F. File an amendment Percentage of expenses allowed for rental. File an amendment Divide line C by line E     F. File an amendment   PART II. File an amendment Allowable Rental Expenses 1. File an amendment Enter rents received 1. File an amendment   2a. File an amendment Enter the rental portion of deductible home mortgage interest and qualified mortgage insurance premiums (see instructions) 2a. File an amendment       b. File an amendment Enter the rental portion of real estate taxes b. File an amendment       c. File an amendment Enter the rental portion of deductible casualty and theft losses (see instructions) c. File an amendment       d. File an amendment Enter direct rental expenses (see instructions) d. File an amendment       e. File an amendment Fully deductible rental expenses. File an amendment Add lines 2a–2d. File an amendment Enter here and  on the appropriate lines on Schedule E (see instructions) 2e. File an amendment   3. File an amendment Subtract line 2e from line 1. File an amendment If zero or less, enter -0- 3. File an amendment   4a. File an amendment Enter the rental portion of expenses directly related to operating or maintaining  the dwelling unit (such as repairs, insurance, and utilities) 4a. File an amendment       b. File an amendment Enter the rental portion of excess mortgage interest and qualified mortgage insurance premiums (see instructions) b. File an amendment       c. File an amendment Carryover of operating expenses from 2012 worksheet c. File an amendment       d. File an amendment Add lines 4a–4c d. File an amendment       e. File an amendment Allowable expenses. File an amendment Enter the smaller of line 3 or line 4d (see instructions) 4e. File an amendment   5. File an amendment Subtract line 4e from line 3. File an amendment If zero or less, enter -0- 5. File an amendment   6a. File an amendment Enter the rental portion of excess casualty and theft losses (see instructions) 6a. File an amendment       b. File an amendment Enter the rental portion of depreciation of the dwelling unit b. File an amendment       c. File an amendment Carryover of excess casualty losses and depreciation from 2012 worksheet c. File an amendment       d. File an amendment Add lines 6a–6c d. File an amendment       e. File an amendment Allowable excess casualty and theft losses and depreciation. File an amendment Enter the smaller of  line 5 or line 6d (see instructions) 6e. File an amendment   PART III. File an amendment Carryover of Unallowed Expenses to Next Year 7a. File an amendment Operating expenses to be carried over to next year. File an amendment Subtract line 4e from line 4d 7a. File an amendment   b. File an amendment Excess casualty and theft losses and depreciation to be carried over to next year. File an amendment  Subtract line 6e from line 6d b. File an amendment   Worksheet 9-1 Instructions. File an amendment Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Caution. File an amendment 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. File an amendment Line 2a. File an amendment Figure the mortgage interest on the dwelling unit that you could deduct on Schedule A as if you had not rented the unit. File an amendment Do not include interest on a loan that did not benefit the dwelling unit. File an amendment 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. File an amendment Include interest on a loan used to buy, build, or improve the dwelling unit, or to refinance such a loan. File an amendment Include the rental portion of this interest in the total you enter on line 2a of the worksheet. File an amendment   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. File an amendment See the Schedule A instructions. File an amendment However, figure your adjusted gross income (Form 1040, line 38) without your rental income and expenses from the dwelling unit. File an amendment See Line 4b to deduct the part of the qualified mortgage insurance premiums not allowed because of the adjusted gross income limit. File an amendment Include the rental portion of the amount from Schedule A, line 13, in the total you enter on line 2a of the worksheet. File an amendment   Note. File an amendment Do not file this Schedule A or use it to figure the amount to deduct on line 13 of that schedule. File an amendment Instead, figure the personal portion on a separate Schedule A. File an amendment 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. File an amendment           Line 2c. File an amendment 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. File an amendment To do this, complete Section A of Form 4684, Casualties and Thefts, treating the losses as personal losses. File an amendment If any of the loss is due to a federally declared disaster, see the Instructions for Form 4684. File an amendment On Form 4684, line 17, enter 10% of your adjusted gross income figured without your rental income and expenses from the dwelling unit. File an amendment Enter the rental portion of the result from Form 4684, line 18, on line 2c of this worksheet. File an amendment   Note. File an amendment Do not file this Form 4684 or use it to figure your personal losses on Schedule A. File an amendment Instead, figure the personal portion on a separate Form 4684. File an amendment           Line 2d. File an amendment Enter the total of your rental expenses that are directly related only to the rental activity. File an amendment These include interest on loans used for rental activities other than to buy, build, or improve the dwelling unit. File an amendment Also include rental agency fees, advertising, office supplies, and depreciation on office equipment used in your rental activity. File an amendment           Line 2e. File an amendment 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. File an amendment Enter the amounts on lines 2a, 2b, 2c, and 2d on the appropriate lines of Schedule E. File an amendment           Line 4b. File an amendment 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. File an amendment 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. File an amendment Do not include interest on a loan that did not benefit the dwelling unit (as explained in the line 2a instructions). File an amendment           Line 4e. File an amendment 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. File an amendment *           Line 6a. File an amendment To find the rental portion of excess casualty and theft losses, use the Form 4684 you prepared for line 2c of this worksheet. File an amendment   A. File an amendment Enter the amount from Form 4684, line 10       B. File an amendment Enter the rental portion of line A       C. File an amendment Enter the amount from line 2c of this worksheet       D. File an amendment Subtract line C from line B. File an amendment Enter the result here and on line 6a of this worksheet               Line 6e. File an amendment 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. File an amendment * *Allocating the limited deduction. File an amendment 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. File an amendment Enter the amount you allocate to each expense on the appropriate line of Schedule E, Part I. File an amendment Prev  Up  Next   Home   More Online Publications
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Understanding Your CP210/CP220 Notice

We made change(s) for the tax year specified on the notice.


What you need to do

  • Read your notice carefully - it explains the changes we made to your tax account.
  • If you agree, make your payment (if you have a balance) by your due date. Go to the payments page to find out more about your payment options.
  • If you disagree, contact us at the toll-free number on the top right corner of your notice.
  • Correct the copy of your tax return that you kept for your records.

You may want to


Answers to Common Questions

Q. The notice says "Based on the information you provided, we changed your 200X Form XXXX to correct your...", but I don't remember sending any change to IRS. How can I find out what IRS received to initiate this change?

A. Please contact us at the number listed on the top right corner of your notice for specific information about your tax return. 

Q. What do I say when I call the IRS?

A. Mention that you received a CP210 or CP 220 notice and you need to review your account with a customer service representative. Be sure to have a copy of your notice and your tax return before you call. 

Q. What should I do if I disagree with the changes you made?

A. If you disagree, contact us at the toll-free number listed on the top right corner of your notice. 

Q. What happens if I can't pay the full amount I owe?

A. See if you may be able to set up a payment plan through our Online Payment Agreement Application

Q. Am I charged interest on the money I owe?

A. If you don't full pay the amount you owe by the date on your notice, interest will accrue on the unpaid balance after that date. 

Q. Will I receive a penalty if I can't pay the full amount?

A. Yes, you'll receive a late payment penalty if you did not pay the tax in full. You can contact us at the number listed on your notice if you’re unable to pay the full amount shown in your specific notice because of circumstances beyond your control. Contact us by the due date of your payment and, depending on your situation, we may be able to remove the penalty. 

Q. What if I'm due a refund and haven't received it within 2-3 weeks?

A. If you don't owe other taxes or debts we're required to collect, such as child support, and 3 weeks have lapsed, call us at the toll-free number listed on the top right corner of your notice. 

Q. Will I receive information about the interest that I need to report on my next tax return?

A. If you were paid $10 or more in interest, you'll receive a Form 1099-INT from IRS by January 31st of next year. Please note, even if the interest amount paid to you is less than $10, you must report this amount on your tax return. 

Q. What if I need to make another correction to my account?

A. You'll need to file an amended return. 

Q. What if I have tried to get answers and after contacting IRS several times have not been successful?

A. Call Taxpayer Advocate at 1-877-777-4778 or for TTY/TDD 1-800-829-4059. 

Q. What if I think I’m a victim of identity theft?

A. Please contact us at the number listed on the top right corner of your notice. Refer to the IRS Identity Theft resource page for more information.


Tips for next year

  • Consider filing your taxes electronically in the future if you did not file this return electronically. Filing online can help you avoid mistakes. Learn more about e-file.

 

 

Page Last Reviewed or Updated: 27-Jan-2014

Printable samples of this notice (PDF)

 

 

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The File An Amendment

File an amendment Index A Active participation, Active participation. File an amendment Activity Appropriate economic unit, Appropriate Economic Units Nonpassive, Activities That Are Not Passive Activities Trade or business, Passive Activities Amounts borrowed, Amounts borrowed. File an amendment Amounts not at risk, Amounts Not At Risk, Other loss limiting arrangements. File an amendment Appropriate economic unit, Appropriate Economic Units Assistance (see Tax help) At-risk activities Aggregation of, Aggregation of Activities Separation of, Separation of Activities At-risk amounts, At-Risk Amounts Government price support programs, Effect of government price support programs. File an amendment Increasing amounts, Effect of increasing amounts at risk in subsequent years. File an amendment Nonrecourse financing, Nonrecourse financing. File an amendment At-risk limits, At-Risk Limits Closely held corporation, Closely held C corporation. File an amendment Loss defined, Loss defined. File an amendment Partners, Loss limits for partners and S corporation shareholders. File an amendment S corporation shareholders, Loss limits for partners and S corporation shareholders. File an amendment Who is affected, Who Is Affected? At-risk rules Activities covered by, Activities Covered by the At-Risk Rules Exceptions to, Exception for holding real property placed in service before 1987. File an amendment Excluded business, Qualifying business. File an amendment Qualified corporation, Qualified corporation. File an amendment Qualifying business, Qualifying business. File an amendment Recapture rule, Recapture Rule B Borrowed amounts, Amounts borrowed. File an amendment C Closely held corporation, Closely held C corporation. File an amendment Commercial revitalization deduction, Commercial revitalization deduction (CRD). File an amendment Corporations Closely held, Corporations. File an amendment , Corporations. File an amendment Controlled group of, Controlled group of corporations. File an amendment Personal service, Corporations. File an amendment , Corporations. File an amendment Qualified, Qualified corporation. File an amendment CRD, Commercial revitalization deduction (CRD). File an amendment D Deductions, passive activity, Passive Activity Deductions Disabled farmer, Retired or disabled farmer and surviving spouse of a farmer. File an amendment Disclosure requirement, Appropriate Economic Units Dispositions Death, Dispositions by death. File an amendment Gift, Dispositions by gift. File an amendment Installment sale, Installment sale of an entire interest. File an amendment Partial, Partial dispositions. File an amendment E Excluded business, definition of, Qualifying business. File an amendment F Farm loss, Excess Farm Loss Farmer, Retired or disabled farmer and surviving spouse of a farmer. File an amendment Form 6198, Form 6198. File an amendment 8582, Step Three—Completing Form 8582 8810, Who Must Use These Rules? Former passive activity, Treatment of former passive activities. File an amendment Free tax services, Free help with your tax return. File an amendment G Grouping passive activities, Grouping Your Activities H Help (see Tax help) I Income, passive activity, Passive Activity Income L Limited entrepreneur, Limited entrepreneur. File an amendment Limited partners, Limited partners. File an amendment M Material participation, Material Participation, Corporations. File an amendment Modified adjusted gross income, Phaseout rule. File an amendment N Nonrecourse loan, Nonrecourse financing. File an amendment P Participation, Participation. File an amendment Active, Active participation. File an amendment Material, Material Participation Passive activity, Passive Activity Limits Comprehensive example, How To Report Your Passive Activity Loss Disposition, Dispositions Former, Treatment of former passive activities. File an amendment Grouping, Grouping Your Activities Limits, Passive Activity Limits Material participation, Material Participation Rental, Rental Activities Rules, Passive Activities, Grouping Your Activities Who must use these rules, Who Must Use These Rules? Passive activity deductions, Passive Activity Deductions Passive activity income, Passive Activity Income Passive income, recharacterization of, Recharacterization of Passive Income Publications (see Tax help) Publicly traded partnership, Publicly Traded Partnership, Publicly traded partnership (PTP). File an amendment Q Qualified person, nonrecourse financing, Qualified person. File an amendment Qualifying business, at-risk rules, Qualifying business. File an amendment R Real estate professional, Real Estate Professional Recapture rule under at-risk limits, Recapture Rule Recharacterization of passive income, Recharacterization of Passive Income Reductions of amounts at risk, Reductions of Amounts At Risk Related persons, Related persons. File an amendment Rental activity $25,000 offset, Special $25,000 allowance. File an amendment Active participation, Active participation. File an amendment Exceptions, Exceptions. File an amendment Phaseout rule, Phaseout rule. File an amendment Real estate professional, Real Estate Professional Retired farmer, Retired or disabled farmer and surviving spouse of a farmer. File an amendment S Section 1245 property, Section 1245 property. File an amendment Self-charged interest, Self-charged interest. File an amendment Separate activity, Separation of Activities Significant participation passive activities, Significant Participation Passive Activities Special $25,000 allowance, Special $25,000 allowance. File an amendment Surviving spouse of farmer, Retired or disabled farmer and surviving spouse of a farmer. File an amendment T Tax help, How To Get Tax Help Trade or business activities Definition of, Trade or Business Activities Real property, Real property trades or businesses. File an amendment W Worksheet 1, Worksheet 1. File an amendment Worksheet 3, Worksheet 3. File an amendment Worksheet 4, Step Four—Completing Worksheet 4 Worksheet 5, Step Five—Completing Worksheet 5 Worksheet 6, Step Six—Using Worksheets 6 and 7 Worksheet 7, Step Six—Using Worksheets 6 and 7 Worksheet A, Worksheet A. File an amendment , Worksheet A. File an amendment Significant Participation Passive Activities Worksheet B, Worksheet B. File an amendment , Worksheet B. File an amendment Significant Participation Activities With Net Income Prev  Up     Home   More Online Publications