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Free Federal Tax Filing 2012

Free federal tax filing 2012 5. Free federal tax filing 2012   Personal Use of Dwelling Unit (Including Vacation Home) Table of Contents Dividing Expenses Dwelling Unit Used as a HomeMain home. Free federal tax filing 2012 Shared equity financing agreement. Free federal tax filing 2012 Donation of use of the property. Free federal tax filing 2012 Examples. Free federal tax filing 2012 Days used for repairs and maintenance. Free federal tax filing 2012 Days used as a main home before or after renting. Free federal tax filing 2012 Reporting Income and DeductionsNot used as a home. Free federal tax filing 2012 Used as a home but rented less than 15 days. Free federal tax filing 2012 Used as a home and rented 15 days or more. Free federal tax filing 2012 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. Free federal tax filing 2012 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. Free federal tax filing 2012 Only your rental expenses may deducted on Schedule E (Form 1040). Free federal tax filing 2012 Some of your personal expenses may be deductible if you itemize your deductions on Schedule A (Form 1040). Free federal tax filing 2012 You must also determine if the dwelling unit is considered a home. Free federal tax filing 2012 The amount of rental expenses that you can deduct may be limited if the dwelling unit is considered a home. Free federal tax filing 2012 Whether a dwelling unit is considered a home depends on how many days during the year are considered to be days of personal use. Free federal tax filing 2012 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. Free federal tax filing 2012 Dwelling unit. Free federal tax filing 2012   A dwelling unit includes a house, apartment, condominium, mobile home, boat, vacation home, or similar property. Free federal tax filing 2012 It also includes all structures or other property belonging to the dwelling unit. Free federal tax filing 2012 A dwelling unit has basic living accommodations, such as sleeping space, a toilet, and cooking facilities. Free federal tax filing 2012   A dwelling unit does not include property (or part of the property) used solely as a hotel, motel, inn, or similar establishment. Free federal tax filing 2012 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. Free federal tax filing 2012 Example. Free federal tax filing 2012 You rent a room in your home that is always available for short-term occupancy by paying customers. Free federal tax filing 2012 You do not use the room yourself and you allow only paying customers to use the room. Free federal tax filing 2012 This room is used solely as a hotel, motel, inn, or similar establishment and is not a dwelling unit. Free federal tax filing 2012 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. Free federal tax filing 2012 When dividing your expenses, follow these rules. Free federal tax filing 2012 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. Free federal tax filing 2012 (This rule does not apply when determining whether you used the unit as a home. Free federal tax filing 2012 ) Any day that the unit is available for rent but not actually rented is not a day of rental use. Free federal tax filing 2012 Fair rental price. Free federal tax filing 2012   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. Free federal tax filing 2012 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. Free federal tax filing 2012   Ask yourself the following questions when comparing another property with yours. Free federal tax filing 2012 Is it used for the same purpose? Is it approximately the same size? Is it in approximately the same condition? Does it have similar furnishings? Is it in a similar location? If any of the answers are no, the properties probably are not similar. Free federal tax filing 2012 Example. Free federal tax filing 2012 Your beach cottage was available for rent from June 1 through August 31 (92 days). Free federal tax filing 2012 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 during that time. Free federal tax filing 2012 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. Free federal tax filing 2012 Your family also used the cottage during the last 2 weeks of May (14 days). Free federal tax filing 2012 The cottage was not used at all before May 17 or after August 31. Free federal tax filing 2012 You figure the part of the cottage expenses to treat as rental expenses as follows. Free federal tax filing 2012 The cottage was used for rental a total of 85 days (92 − 7). Free federal tax filing 2012 The days it was available for rent but not rented (7 days) are not days of rental use. Free federal tax filing 2012 The July weekend (2 days) you used it is rental use because you received a fair rental price for the weekend. Free federal tax filing 2012 You used the cottage for personal purposes for 14 days (the last 2 weeks in May). Free federal tax filing 2012 The total use of the cottage was 99 days (14 days personal use + 85 days rental use). Free federal tax filing 2012 Your rental expenses are 85/99 (86%) of the cottage expenses. Free federal tax filing 2012 Note. Free federal tax filing 2012 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. Free federal tax filing 2012 Therefore, you had 16 days of personal use and 83 days of rental use for this purpose. Free federal tax filing 2012 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. Free federal tax filing 2012 If you have a net loss, you may not be able to deduct all of the rental expenses. Free federal tax filing 2012 See Dwelling Unit Used as a Home, next. Free federal tax filing 2012 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. Free federal tax filing 2012 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. Free federal tax filing 2012 See What is a day of personal use , later. Free federal tax filing 2012 If a dwelling unit is used for personal purposes on a day it is rented at a fair rental price (discussed earlier), do not count that day as a day of rental use in applying (2) above. Free federal tax filing 2012 Instead, count it as a day of personal use in applying both (1) and (2) above. Free federal tax filing 2012 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. Free federal tax filing 2012 You or any other person who owns an interest in it, unless you rent it to another owner as his or her main home under a shared equity financing agreement (defined later). Free federal tax filing 2012 However, see Days used as a main home before or after renting , later. Free federal tax filing 2012 A member of your family or a member of the family of any other person who owns an interest in it, unless the family member uses the dwelling unit as his or her main home and pays a fair rental price. Free federal tax filing 2012 Family includes only your spouse, brothers and sisters, half-brothers and half-sisters, ancestors (parents, grandparents, etc. Free federal tax filing 2012 ), and lineal descendants (children, grandchildren, etc. Free federal tax filing 2012 ). Free federal tax filing 2012 Anyone under an arrangement that lets you use some other dwelling unit. Free federal tax filing 2012 Anyone at less than a fair rental price. Free federal tax filing 2012 Main home. Free federal tax filing 2012   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. Free federal tax filing 2012 Shared equity financing agreement. Free federal tax filing 2012   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. Free federal tax filing 2012 Donation of use of the property. Free federal tax filing 2012   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. Free federal tax filing 2012 Examples. Free federal tax filing 2012   The following examples show how to determine if you have days of personal use. Free federal tax filing 2012 Example 1. Free federal tax filing 2012 You and your neighbor are co-owners of a condominium at the beach. Free federal tax filing 2012 Last year, you rented the unit to vacationers whenever possible. Free federal tax filing 2012 The unit was not used as a main home by anyone. Free federal tax filing 2012 Your neighbor used the unit for 2 weeks last year; you did not use it at all. Free federal tax filing 2012 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. Free federal tax filing 2012 Example 2. Free federal tax filing 2012 You and your neighbors are co-owners of a house under a shared equity financing agreement. Free federal tax filing 2012 Your neighbors live in the house and pay you a fair rental price. Free federal tax filing 2012 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. Free federal tax filing 2012 This is because your neighbors rent the house as their main home under a shared equity financing agreement. Free federal tax filing 2012 Example 3. Free federal tax filing 2012 You own a rental property that you rent to your son. Free federal tax filing 2012 Your son does not own any interest in this property. Free federal tax filing 2012 He uses it as his main home and pays you a fair rental price. Free federal tax filing 2012 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. Free federal tax filing 2012 Example 4. Free federal tax filing 2012 You rent your beach house to Rosa. Free federal tax filing 2012 Rosa rents her cabin in the mountains to you. Free federal tax filing 2012 You each pay a fair rental price. Free federal tax filing 2012 You are using your beach house for personal purposes on the days that Rosa uses it because your house is used by Rosa under an arrangement that allows you to use her cabin. Free federal tax filing 2012 Example 5. Free federal tax filing 2012 You rent an apartment to your mother at less than a fair rental price. Free federal tax filing 2012 You are using the apartment for personal purposes on the days that your mother rents it because you rent it for less than a fair rental price. Free federal tax filing 2012 Days used for repairs and maintenance. Free federal tax filing 2012   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. Free federal tax filing 2012 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. Free federal tax filing 2012 Example. Free federal tax filing 2012 Corey owns a cabin in the mountains that he rents for most of the year. Free federal tax filing 2012 He spends a week at the cabin with family members. Free federal tax filing 2012 Corey works on maintenance of the cabin 3 or 4 hours each day during the week and spends the rest of the time fishing, hiking, and relaxing. Free federal tax filing 2012 Corey's family members, however, work substantially full time on the cabin each day during the week. Free federal tax filing 2012 The main purpose of being at the cabin that week is to do maintenance work. Free federal tax filing 2012 Therefore, the use of the cabin during the week by Corey and his family will not be considered personal use by Corey. Free federal tax filing 2012 Days used as a main home before or after renting. Free federal tax filing 2012   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. Free federal tax filing 2012 Do not count them as days of personal use if: You rented or tried to rent the property for 12 or more consecutive months. Free federal tax filing 2012 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. Free federal tax filing 2012 However, this special rule does not apply when dividing expenses between rental and personal use. Free federal tax filing 2012 See Property Changed to Rental Use in chapter 4. Free federal tax filing 2012 Example 1. Free federal tax filing 2012 On February 29, 2012, you moved out of the house you had lived in for 6 years because you accepted a job in another town. Free federal tax filing 2012 You rented your house at a fair rental price from March 15, 2012, to May 14, 2013 (14 months). Free federal tax filing 2012 On June 1, 2013, you moved back into your old house. Free federal tax filing 2012 The days you used the house as your main home from January 1 to February 29, 2012, and from June 1 to December 31, 2013, are not counted as days of personal use. Free federal tax filing 2012 Therefore, you would use the rules in chapter 1 when figuring your rental income and expenses. Free federal tax filing 2012 Example 2. Free federal tax filing 2012 On January 31, you moved out of the condominium where you had lived for 3 years. Free federal tax filing 2012 You offered it for rent at a fair rental price beginning on February 1. Free federal tax filing 2012 You were unable to rent it until April. Free federal tax filing 2012 On September 15, you sold the condominium. Free federal tax filing 2012 The days you used the condominium as your main home from January 1 to January 31 are not counted as days of personal use when determining whether you used it as a home. Free federal tax filing 2012 Examples. Free federal tax filing 2012   The following examples show how to determine whether you used your rental property as a home. Free federal tax filing 2012 Example 1. Free federal tax filing 2012 You converted the basement of your home into an apartment with a bedroom, a bathroom, and a small kitchen. Free federal tax filing 2012 You rented the basement apartment at a fair rental price to college students during the regular school year. Free federal tax filing 2012 You rented to them on a 9-month lease (273 days). Free federal tax filing 2012 You figured 10% of the total days rented to others at a fair rental price is 27 days. Free federal tax filing 2012 During June (30 days), your brothers stayed with you and lived in the basement apartment rent free. Free federal tax filing 2012 Your basement apartment was used as a home because you used it for personal purposes for 30 days. Free federal tax filing 2012 Rent-free use by your brothers is considered personal use. Free federal tax filing 2012 Your personal use (30 days) is more than the greater of 14 days or 10% of the total days it was rented (27 days). Free federal tax filing 2012 Example 2. Free federal tax filing 2012 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). Free federal tax filing 2012 Your sister-in-law stayed in the room, rent free, for the last 3 weeks (21 days) in July. Free federal tax filing 2012 You figured 10% of the total days rented to others at a fair rental price is 3 days. Free federal tax filing 2012 The room was used as a home because you used it for personal purposes for 21 days. Free federal tax filing 2012 That is more than the greater of 14 days or 10% of the 27 days it was rented (3 days). Free federal tax filing 2012 Example 3. Free federal tax filing 2012 You own a condominium apartment in a resort area. Free federal tax filing 2012 You rented it at a fair rental price for a total of 170 days during the year. Free federal tax filing 2012 For 12 of these 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. Free federal tax filing 2012 Your family actually used the apartment for 10 of those days. Free federal tax filing 2012 Therefore, the apartment is treated as having been rented for 160 (170 – 10) days. Free federal tax filing 2012 You figured 10% of the total days rented to others at a fair rental price is 16 days. Free federal tax filing 2012 Your family also used the apartment for 7 other days during the year. Free federal tax filing 2012 You used the apartment as a home because you used it for personal purposes for 17 days. Free federal tax filing 2012 That is more than the greater of 14 days or 10% of the 160 days it was rented (16 days). Free federal tax filing 2012 Minimal rental use. Free federal tax filing 2012   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. Free federal tax filing 2012 See Used as a home but rented less than 15 days, later, for more information. Free federal tax filing 2012 Limit on deductions. Free federal tax filing 2012   Renting a dwelling unit that is considered a home is not a passive activity. Free federal tax filing 2012 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. Free federal tax filing 2012 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. Free federal tax filing 2012 Any expenses carried forward to the next year will be subject to any limits that apply for that year. Free federal tax filing 2012 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. Free federal tax filing 2012   To figure your deductible rental expenses for this year and any carryover to next year, use Worksheet 5–1. Free federal tax filing 2012 Reporting Income and Deductions Property not used for personal purposes. Free federal tax filing 2012   If you do not use a dwelling unit for personal purposes, see chapter 3 for how to report your rental income and expenses. Free federal tax filing 2012 Property used for personal purposes. Free federal tax filing 2012   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. Free federal tax filing 2012 Not used as a home. Free federal tax filing 2012   If you use a dwelling unit for personal purposes, but not as a home, report all the rental income in your income. Free federal tax filing 2012 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 this chapter under Dividing Expenses . Free federal tax filing 2012 The expenses for personal use are not deductible as rental expenses. Free federal tax filing 2012   Your deductible rental expenses can be more than your gross rental income; however, see Limits on Rental Losses in chapter 3. Free federal tax filing 2012 Used as a home but rented less than 15 days. Free federal tax filing 2012   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). Free federal tax filing 2012 You are not required to report the rental income and rental expenses from this activity. Free federal tax filing 2012 The expenses, including qualified mortgage interest, property taxes, and any qualified casualty loss will be reported as normally allowed on Schedule A (Form 1040). Free federal tax filing 2012 See the Instructions for Schedule A (Form 1040) for more information on deducting these expenses. Free federal tax filing 2012 Used as a home and rented 15 days or more. Free federal tax filing 2012   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. Free federal tax filing 2012 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 this chapter under Dividing Expenses . Free federal tax filing 2012 The expenses for personal use are not deductible as rental expenses. Free federal tax filing 2012   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. Free federal tax filing 2012 You do not need to use Worksheet 5-1. Free federal tax filing 2012   However, if you had a net loss from renting the dwelling unit for the year, your deduction for certain rental expenses is limited. Free federal tax filing 2012 To figure your deductible rental expenses and any carryover to next year, use Worksheet 5–1. Free federal tax filing 2012 Worksheet 5-1. Free federal tax filing 2012 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. Free federal tax filing 2012 Did you use the dwelling unit as a home this year? (See Dwelling Unit Used as a Home . Free federal tax filing 2012 ) 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. Free federal tax filing 2012 Rental Use Percentage A. Free federal tax filing 2012 Total days available for rent at fair rental price A. Free federal tax filing 2012       B. Free federal tax filing 2012 Total days available for rent (line A) but not rented B. Free federal tax filing 2012       C. Free federal tax filing 2012 Total days of rental use. Free federal tax filing 2012 Subtract line B from line A C. Free federal tax filing 2012       D. Free federal tax filing 2012 Total days of personal use (including days rented at less than fair rental price) D. Free federal tax filing 2012       E. Free federal tax filing 2012 Total days of rental and personal use. Free federal tax filing 2012 Add lines C and D E. Free federal tax filing 2012       F. Free federal tax filing 2012 Percentage of expenses allowed for rental. Free federal tax filing 2012 Divide line C by line E     F. Free federal tax filing 2012 . Free federal tax filing 2012 PART II. Free federal tax filing 2012 Allowable Rental Expenses 1. Free federal tax filing 2012 Enter rents received 1. Free federal tax filing 2012   2a. Free federal tax filing 2012 Enter the rental portion of deductible home mortgage interest and qualified mortgage insurance premiums (see instructions) 2a. Free federal tax filing 2012       b. Free federal tax filing 2012 Enter the rental portion of real estate taxes b. Free federal tax filing 2012       c. Free federal tax filing 2012 Enter the rental portion of deductible casualty and theft losses (see instructions) c. Free federal tax filing 2012       d. Free federal tax filing 2012 Enter direct rental expenses (see instructions) d. Free federal tax filing 2012       e. Free federal tax filing 2012 Fully deductible rental expenses. Free federal tax filing 2012 Add lines 2a–2d. Free federal tax filing 2012 Enter here and  on the appropriate lines on Schedule E (see instructions) 2e. Free federal tax filing 2012   3. Free federal tax filing 2012 Subtract line 2e from line 1. Free federal tax filing 2012 If zero or less, enter -0- 3. Free federal tax filing 2012   4a. Free federal tax filing 2012 Enter the rental portion of expenses directly related to operating or maintaining  the dwelling unit (such as repairs, insurance, and utilities) 4a. Free federal tax filing 2012       b. Free federal tax filing 2012 Enter the rental portion of excess mortgage interest and qualified mortgage insurance premiums (see instructions) b. Free federal tax filing 2012       c. Free federal tax filing 2012 Carryover of operating expenses from 2012 worksheet c. Free federal tax filing 2012       d. Free federal tax filing 2012 Add lines 4a–4c d. Free federal tax filing 2012       e. Free federal tax filing 2012 Allowable expenses. Free federal tax filing 2012 Enter the smaller of line 3 or line 4d (see instructions) 4e. Free federal tax filing 2012   5. Free federal tax filing 2012 Subtract line 4e from line 3. Free federal tax filing 2012 If zero or less, enter -0- 5. Free federal tax filing 2012   6a. Free federal tax filing 2012 Enter the rental portion of excess casualty and theft losses (see instructions) 6a. Free federal tax filing 2012       b. Free federal tax filing 2012 Enter the rental portion of depreciation of the dwelling unit b. Free federal tax filing 2012       c. Free federal tax filing 2012 Carryover of excess casualty losses and depreciation from 2012 worksheet c. Free federal tax filing 2012       d. Free federal tax filing 2012 Add lines 6a–6c d. Free federal tax filing 2012       e. Free federal tax filing 2012 Allowable excess casualty and theft losses and depreciation. Free federal tax filing 2012 Enter the smaller of  line 5 or line 6d (see instructions) 6e. Free federal tax filing 2012   PART III. Free federal tax filing 2012 Carryover of Unallowed Expenses to Next Year 7a. Free federal tax filing 2012 Operating expenses to be carried over to next year. Free federal tax filing 2012 Subtract line 4e from line 4d 7a. Free federal tax filing 2012   b. Free federal tax filing 2012 Excess casualty and theft losses and depreciation to be carried over to next year. Free federal tax filing 2012  Subtract line 6e from line 6d b. Free federal tax filing 2012   Worksheet 5-1 Instructions. Free federal tax filing 2012 Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Caution. Free federal tax filing 2012 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. Free federal tax filing 2012 Line 2a. Free federal tax filing 2012 Figure the mortgage interest on the dwelling unit that you could deduct on Schedule A as if you had not rented the unit. Free federal tax filing 2012 Do not include interest on a loan that did not benefit the dwelling unit. Free federal tax filing 2012 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. Free federal tax filing 2012 Include interest on a loan used to buy, build, or improve the dwelling unit, or to refinance such a loan. Free federal tax filing 2012 Include the rental portion of this interest in the total you enter on line 2a of the worksheet. Free federal tax filing 2012   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. Free federal tax filing 2012 See the Schedule A instructions. Free federal tax filing 2012 However, figure your adjusted gross income (Form 1040, line 38) without your rental income and expenses from the dwelling unit. Free federal tax filing 2012 See Line 4b to deduct the part of the qualified mortgage insurance premiums not allowed because of the adjusted gross income limit. Free federal tax filing 2012 Include the rental portion of the amount from Schedule A, line 13, in the total you enter on line 2a of the worksheet. Free federal tax filing 2012   Note. Free federal tax filing 2012 Do not file this Schedule A or use it to figure the amount to deduct on line 13 of that schedule. Free federal tax filing 2012 Instead, figure the personal portion on a separate Schedule A. Free federal tax filing 2012 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. Free federal tax filing 2012           Line 2c. Free federal tax filing 2012 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. Free federal tax filing 2012 To do this, complete Section A of Form 4684, Casualties and Thefts, treating the losses as personal losses. Free federal tax filing 2012 If any of the loss is due to a federally declared disaster, see the Instructions for Form 4684. Free federal tax filing 2012 On Form 4684, line 17, enter 10% of your adjusted gross income figured without your rental income and expenses from the dwelling unit. Free federal tax filing 2012 Enter the rental portion of the result from Form 4684, line 18, on line 2c of this worksheet. Free federal tax filing 2012   Note. Free federal tax filing 2012 Do not file this Form 4684 or use it to figure your personal losses on Schedule A. Free federal tax filing 2012 Instead, figure the personal portion on a separate Form 4684. Free federal tax filing 2012           Line 2d. Free federal tax filing 2012 Enter the total of your rental expenses that are directly related only to the rental activity. Free federal tax filing 2012 These include interest on loans used for rental activities other than to buy, build, or improve the dwelling unit. Free federal tax filing 2012 Also include rental agency fees, advertising, office supplies, and depreciation on office equipment used in your rental activity. Free federal tax filing 2012           Line 2e. Free federal tax filing 2012 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. Free federal tax filing 2012 Enter the amounts on lines 2a, 2b, 2c, and 2d on the appropriate lines of Schedule E. Free federal tax filing 2012           Line 4b. Free federal tax filing 2012 On line 2a, you entered the rental portion of the mortgage interest or qualified mortgage insurance premiums you could deduct on Schedule A if you had not rented the dwelling unit. Free federal tax filing 2012 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. Free federal tax filing 2012 Do not include interest on a loan that did not benefit the dwelling unit  (as explained in the line 2a instructions). Free federal tax filing 2012           Line 4e. Free federal tax filing 2012 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. Free federal tax filing 2012 *           Line 6a. Free federal tax filing 2012 To find the rental portion of excess casualty and theft losses, use the Form 4684 you prepared for line 2c of this worksheet. Free federal tax filing 2012   A. Free federal tax filing 2012 Enter the amount from Form 4684, line 10       B. Free federal tax filing 2012 Enter the rental portion of line A       C. Free federal tax filing 2012 Enter the amount from line 2c of this worksheet       D. Free federal tax filing 2012 Subtract line C from line B. Free federal tax filing 2012 Enter the result here and on line 6a of this worksheet               Line 6e. Free federal tax filing 2012 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. Free federal tax filing 2012 * *Allocating the limited deduction. Free federal tax filing 2012 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. Free federal tax filing 2012 Enter the amount you allocate to each expense on the appropriate line of Schedule E, Part I. Free federal tax filing 2012 Prev  Up  Next   Home   More Online Publications
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Understanding your CP2006 Notice

 
We received your information. We'll look at it and let you know what we're going to do.


What you need to do

  • Read your notice carefully.
  • You don't have to do anything.
  • You don't have to answer the notice.
  • If you have a payment plan for another IRS debt, keep making your payments.

You may want to...

  • Fill out and send us a Form 2848, Power of Attorney and Declaration of Representative to allow someone (such as an accountant) to contact us on your behalf.
  • Keep a copy of your notice for your files.
  • Contact us by mail or by calling the toll free number on your notice with any questions we haven't answered below.

Answers to Common Questions

Why did it take you so long to contact me about this matter?
Our computer systems match the information you report on your tax return with information reported by employers, banks, businesses, and others. This matching takes several months to complete.

I got a deficiency notice. It says I have 90 days to petition the U.S. Tax Court. Does this notice give me more time?
No, you still only have 90 days.

The deficiency notice I got says I have 150 days to petition the U.S. Tax Court. Why doesn't it say 90 days?
You have 150 days for deficiency notices sent outside the U.S. The new notice you just received does not extend the 150 days.


Tips for next year

Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions that you may qualify for. In many cases you can file for free. Learn more about e-file.

Page Last Reviewed or Updated: 28-Feb-2014

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 Free Federal Tax Filing 2012

Free federal tax filing 2012 Index A Alternative annuity option How to report, How to report. Free federal tax filing 2012 Lump-sum payment, Alternative Annuity Option Annual leave, Annual leave. Free federal tax filing 2012 Annuity Starting date, Annuity starting date. Free federal tax filing 2012 Statement, Annuity statement. Free federal tax filing 2012 With survivor benefit, CSRS or FERS Survivor Annuity Without survivor benefit, Choosing a survivor annuity after retirement. Free federal tax filing 2012 Assistance (see Tax help) B Benefits, how to report, How To Report Benefits C Child's temporary annuity, Surviving spouse with child. Free federal tax filing 2012 Community property laws, Community property laws. Free federal tax filing 2012 Contributions, refund of, Refund of Contributions Cost (contributions to retirement plan), Your cost. Free federal tax filing 2012 Credit for the elderly or the disabled, Credit for the Elderly or the Disabled D Death benefit, FERS Death Benefit Deduction for estate tax, Income Tax Deduction for Estate Tax Paid Disability retirement, Part III Rules for Disability Retirement and Credit for the Elderly or the Disabled Disabled child, Disabled child. Free federal tax filing 2012 Distributions Qualified domestic relations order (QDRO), Qualified domestic relations order (QDRO). Free federal tax filing 2012 Withholding from TSP payments, Withholding from certain lump-sum payments. Free federal tax filing 2012 E Estate tax, Federal Estate Tax, Income Tax Deduction for Estate Tax Paid Estimated tax, Tax Withholding and Estimated Tax, Estimated tax. Free federal tax filing 2012 F Federal Employees' Compensation Act (FECA), Federal Employees' Compensation Act (FECA). Free federal tax filing 2012 Filing requirements, Filing Requirements Form 1099-R, Withholding from Thrift Savings Plan payments. Free federal tax filing 2012 CSA 1099R, Form CSA 1099R. Free federal tax filing 2012 CSF 1099R, Form CSF 1099R. Free federal tax filing 2012 W-4P-A, Withholding certificate. Free federal tax filing 2012 Free tax services, Free help with your tax return. Free federal tax filing 2012 G General Rule, General Rule, General Rule. Free federal tax filing 2012 Gift tax, Federal Gift Tax H Help (see Tax help) I Income in respect of a decedent, Income Tax Deduction for Estate Tax Paid Income tax withholding, Tax Withholding and Estimated Tax, Withholding. Free federal tax filing 2012 L Lump-sum CSRS or FERS payment, Lump-Sum CSRS or FERS Payment, Lump-Sum CSRS or FERS Payment Lump-sum payment Alternative annuity option, Alternative Annuity Option Installments, Lump-sum payment in installments. Free federal tax filing 2012 Withholding, Withholding from certain lump-sum payments. Free federal tax filing 2012 M Mandatory retirement age, Mandatory retirement age. Free federal tax filing 2012 Marital deduction, Marital deduction. Free federal tax filing 2012 Minimum retirement age, Minimum retirement age. Free federal tax filing 2012 N Nonresident alien retiree, Nonresident Aliens P Permanently and totally disabled, Permanently and totally disabled. Free federal tax filing 2012 Physician's statement, Physician's statement. Free federal tax filing 2012 Public safety officers Dependents, Dependents of public safety officers. Free federal tax filing 2012 Insurance premiums, Distributions Used To Pay Insurance Premiums for Public Safety Officers Survivors, Survivors of Slain Public Safety Officers Publications (see Tax help) Q Qualified domestic relations order (QDRO), Qualified domestic relations order (QDRO). Free federal tax filing 2012 R Reemployment after retirement, Reemployment After Retirement Refund of contributions, Refund of Contributions Retirees, rules for, Part II Rules for Retirees Retirement during the past year, Retirement During the Past Year Rollovers Nonspouse beneficiary, Rollovers by nonspouse beneficiary. Free federal tax filing 2012 Rollover rules, Rollover Rules To Roth IRAs, Rollovers to Roth IRAs Roth Thrift Savings Plan, Roth TSP balance. Free federal tax filing 2012 S Simplified Method, Simplified Method, Simplified Method. Free federal tax filing 2012 Substantial gainful activity, Permanently and totally disabled. Free federal tax filing 2012 Survivor annuity, Choosing a survivor annuity after retirement. Free federal tax filing 2012 , CSRS or FERS Survivor Annuity, CSRS or FERS Survivor Annuity Survivors of federal employees, Part IV Rules for Survivors of Federal Employees Survivors of federal retirees, Part V Rules for Survivors of Federal Retirees T Tax help, How To Get Tax Help Thrift Savings Plan, Thrift Savings Plan. Free federal tax filing 2012 , Thrift Savings Plan Roth option, Roth TSP balance. Free federal tax filing 2012 TTY/TDD information, How To Get Tax Help U Uniformed services Thrift Savings Plan, Reminders Unused annual leave, Payment for unused annual leave. Free federal tax filing 2012 V Voluntary contributions, Voluntary contributions. Free federal tax filing 2012 , Voluntary contributions. Free federal tax filing 2012 , Voluntary Contributions W Withholding certificate, Withholding certificate. Free federal tax filing 2012 Withholding of income tax, Tax Withholding and Estimated Tax, Withholding. Free federal tax filing 2012 Worksheets Lump-sum payment at end of survivor annuity, Lump-sum payment at end of survivor annuity. Free federal tax filing 2012 Lump-sum payment to the estate or other beneficiary, Lump-Sum CSRS or FERS Payment Nonresident alien retiree, Nonresident Aliens Simplified Method, Worksheet A. Free federal tax filing 2012 Simplified Method Prev  Up     Home   More Online Publications