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Military H&r Block

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Military H&r Block

Military h&r block 34. Military h&r block   Child Tax Credit Table of Contents Introduction Useful Items - You may want to see: Qualifying Child Amount of CreditLimits on the Credit Claiming the Credit Additional Child Tax Credit Completing Schedule 8812 (Form 1040A or 1040)Part I Parts II–IV Introduction The child tax credit is a credit that may reduce your tax by as much as $1,000 for each of your qualifying children. Military h&r block The additional child tax credit is a credit you may be able to take if you are not able to claim the full amount of the child tax credit. Military h&r block This chapter explains the following. Military h&r block Who is a qualifying child. Military h&r block The amount of the credit. Military h&r block How to claim the credit. Military h&r block The child tax credit and the additional child tax credit should not be confused with the child and dependent care credit discussed in chapter 32. Military h&r block If you have no tax. Military h&r block   Credits, such as the child tax credit or the credit for child and dependent care expenses, are used to reduce tax. Military h&r block If your tax on Form 1040, line 46, or Form 1040A, line 28, is zero, do not figure the child tax credit because there is no tax to reduce. Military h&r block However, you may qualify for the additional child tax credit on line 65 (Form 1040) or line 39 (Form 1040A). Military h&r block Useful Items - You may want to see: Publication 972 Child Tax Credit Form (and Instructions) Schedule 8812 (Form 1040A or 1040) Child Tax Credit W-4 Employee's Withholding Allowance Certificate Qualifying Child A qualifying child for purposes of the child tax credit is a child who: Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your grandchild, niece, or nephew), Was under age 17 at the end of 2013, Did not provide over half of his or her own support for 2013, Lived with you for more than half of 2013 (see Exceptions to time lived with you , later), Is claimed as a dependent on your return, Does not file a joint return for the year (or files it only as a claim for refund), and Was a U. Military h&r block S. Military h&r block citizen, a U. Military h&r block S. Military h&r block national, or a resident of the United States. Military h&r block If the child was adopted, see Adopted child , later. Military h&r block For each qualifying child you must check the box on Form 1040 or Form 1040A, line 6c. Military h&r block Example 1. Military h&r block Your son turned 17 on December 30, 2013. Military h&r block He is a citizen of the United States and you claimed him as a dependent on your return. Military h&r block He is not a qualifying child for the child tax credit because he was not under age 17 at the end of 2013. Military h&r block Example 2. Military h&r block Your daughter turned 8 years old in 2013. Military h&r block She is not a citizen of the United States, has an ITIN, and lived in Mexico all of 2013. Military h&r block She is not a qualifying child for the child tax credit because she was not a resident of the United States for 2013. Military h&r block Filers who have certain child dependents with an Individual Taxpayer Identification Number (ITIN). Military h&r block   If you are claiming a child tax credit or additional child tax credit for a child you identified on your tax return with an ITIN instead of an SSN, you must complete Part I of Schedule 8812 (Form 1040A or 1040). Military h&r block   Although a child may be your dependent, you may only claim a child tax credit or additional child tax credit for a dependent who is a citizen, national, or resident of the United States. Military h&r block To be treated as a resident of the United States, a child generally will need to meet the requirements of the substantial presence test. Military h&r block For more information about the substantial presence test, see Publication 519, U. Military h&r block S. Military h&r block Tax Guide for Aliens. Military h&r block Adopted child. Military h&r block   An adopted child is always treated as your own child. Military h&r block An adopted child includes a child lawfully placed with you for legal adoption. Military h&r block   If you are a U. Military h&r block S. Military h&r block citizen or U. Military h&r block S. Military h&r block national and your adopted child lived with you all year as a member of your household in 2013, that child meets condition (7) above to be a qualifying child for the child tax credit. Military h&r block Exceptions to time lived with you. Military h&r block   A child is considered to have lived with you for more than half of 2013 if the child was born or died in 2013 and your home was this child's home for more than half the time he or she was alive. Military h&r block Temporary absences by you or the child for special circumstances, such as for school, vacation, business, medical care, military service, or detention in a juvenile facility, count as time the child lived with you. Military h&r block   There are also exceptions for kidnapped children and children of divorced or separated parents. Military h&r block For details, see Residency Test in chapter 3. Military h&r block Qualifying child of more than one person. Military h&r block   A special rule applies if your qualifying child is the qualifying child of more than one person. Military h&r block For details, see Special Rule for Qualifying Child of More Than One Person in chapter 3. Military h&r block Amount of Credit The maximum amount you can claim for the credit is $1,000 for each qualifying child. Military h&r block Limits on the Credit You must reduce your child tax credit if either (1) or (2) applies. Military h&r block The amount on Form 1040, line 46, or Form 1040A, line 28, is less than the credit. Military h&r block If this amount is zero, you cannot take this credit because there is no tax to reduce. Military h&r block But you may be able to take the additional child tax credit. Military h&r block See Additional Child Tax Credit , later. Military h&r block Your modified adjusted gross income (AGI) is more than the amount shown below for your filing status. Military h&r block Married filing jointly - $110,000. Military h&r block Single, head of household, or qualifying widow(er) - $75,000. Military h&r block Married filing separately - $55,000. Military h&r block Modified AGI. Military h&r block   For purposes of the child tax credit, your modified AGI is your AGI plus the following amounts that may apply to you. Military h&r block Any amount excluded from income because of the exclusion of income from  Puerto Rico. Military h&r block On the dotted line next to Form 1040, line 38, enter the amount excluded and identify it as “EPRI. Military h&r block ” Also attach a copy of any Form(s) 499R-2/W-2PR to your return. Military h&r block Any amount on line 45 or line 50 of Form 2555, Foreign Earned Income. Military h&r block Any amount on line 18 of Form 2555-EZ, Foreign Earned Income Exclusion. Military h&r block Any amount on line 15 of Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa. Military h&r block   If you do not have any of the above, your modified AGI is the same as your AGI. Military h&r block AGI. Military h&r block   Your AGI is the amount on Form 1040, line 38, or Form 1040A, line 22. Military h&r block Claiming the Credit To claim the child tax credit, you must file Form 1040 or Form 1040A. Military h&r block You cannot claim the child tax credit on Form 1040EZ. Military h&r block You must provide the name and identification number (usually a social security number) on your tax return for each qualifying child. Military h&r block If you claim the child tax credit with a child identified by an ITIN, you must also file Schedule 8812. Military h&r block To figure your credit, first review the Child Tax Credit Worksheet in your Form 1040 or 1040A instructions. Military h&r block If you are instructed to use Publication 972, you may not use the worksheet in your tax return instructions; instead, you must use Publication 972 to figure the credit. Military h&r block If you are not instructed to use Publication 972, you may use the Child Tax Credit Worksheet in your Form 1040 or 1040A instructions or Publication 972 to figure the credit. Military h&r block Additional Child Tax Credit This credit is for certain individuals who get less than the full amount of the child tax credit. Military h&r block The additional child tax credit may give you a refund even if you do not owe any tax. Military h&r block How to claim the additional child tax credit. Military h&r block   To claim the additional child tax credit, follow the steps below. Military h&r block Make sure you figured the amount, if any, of your child tax credit. Military h&r block See Claiming the Credit , earlier. Military h&r block If you answered “Yes” on line 9 or line 10 of the Child Tax Credit Worksheet in the Form 1040 or Form 1040A instructions, or line 13 of the Child Tax Credit Worksheet in Publication 972, use Parts II through IV of Schedule 8812 to see if you can take the additional child tax credit. Military h&r block If you have an additional child tax credit on line 13 of Schedule 8812, carry it to Form 1040, line 65, or Form 1040A, line 39. Military h&r block Completing Schedule 8812 (Form 1040A or 1040) Schedule 8812 contains four parts, but can really be thought of as two sections. Military h&r block Part I is distinct and separate from Parts II–IV. Military h&r block If all your children are identified by social security numbers or IRS adoption taxpayer identification numbers and you are not claiming the additional child tax credit, you do not need to complete or attach Schedule 8812 to your tax return. Military h&r block Part I You only need to complete Part I if you are claiming the child tax credit for a child identified by an IRS individual taxpayer identification number (ITIN). Military h&r block When completing Part I, only answer the questions with regard to children identified by an ITIN; you do not need to complete Part I of Schedule 8812 for any child that is identified by a social security number (SSN) or an IRS adoption taxpayer identification number (ATIN). Military h&r block If all the children for whom you checked the box in column 4 of line 6c on your Form 1040 or Form 1040A are identified by an SSN or an ATIN, you do not need to complete Part I of Schedule 8812. Military h&r block Parts II–IV Parts II–IV help you figure your additional child tax credit. Military h&r block Generally, you should only complete Parts II–IV if you are instructed to do so after completing the Child Tax Credit Worksheet in your tax return instructions or Publication 972. Military h&r block See How to claim the additional child tax credit , earlier. Military h&r block Prev  Up  Next   Home   More Online Publications
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Contact My Local Office in New Jersey

Face-to-face Tax Help

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

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

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

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

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

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

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

City Street Address Days/Hours of Service Telephone*
Cherry Hill 57 Haddonfield Rd.
Cherry Hill, NJ 08002

Monday-Friday - 8:30 a.m. - 4:30 p.m.


Services Provided

(856) 321-1328
Edison 100 Dey Place
Edison, NJ 08817

Monday-Friday - 8:30 a.m. - 4:30 p.m.


Services Provided

(732) 572-9752
Freehold 4 Paragon Way
Freehold, NJ 07728

Monday-Friday - 8:30 a.m. - 4:30 p.m.
 

Services Provided

(732) 660-0063
Mays Landing 5218 Atlantic Ave.
Mays Landing, NJ 08330

Monday-Friday - 8:30 a.m. - 4:30 p.m.
(Closed for lunch 12:30 p.m. - 1:30 p.m.)


Services Provided

(609) 625-0678 
Mountainside  200 Sheffield St.
Mountainside, NJ 07092 

Monday-Friday - 8:30 a.m. - 4:30 p.m.


Services Provided

(908) 301-2112 
Newark  20 Washington Place
Newark, NJ 07102 

Monday-Friday - 8:30 a.m. - 4:30 p.m.
 

Services Provided

(973) 645-6690 
Paramus  1 Kalisa Way
Paramus, NJ 07652 

Monday-Friday - 8:30 a.m. - 4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**


Services Provided

(201) 634-7052 
Parsippany  1719-C Rte. 10
Parsippany, NJ 07054 

Monday-Friday - 8:30 a.m. - 4:30 p.m.


Services Provided

(973) 808-0821 
Paterson  200 Federal Plaza
Paterson, NJ 07505 

Monday-Friday - 8:30 a.m. - 4:30 p.m.


Services Provided

(973) 357-4114 
Trenton  One State St. Square
50 West State St. 
Trenton, NJ 08608 

Monday-Friday - 8:30 a.m. - 4:30 p.m.


Services Provided

(609) 989-0533 

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


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

The Taxpayer Advocate Service: Call (973) 921-4043 in Springfield or 1-877-777-4778 elsewhere, or see Publication 1546, The Taxpayer Advocate Service of the IRS.

For further information, see Tax Topic 104.

Partnerships

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

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

Internal Revenue Service
20 Washington Place
First Floor
Newark, NJ 07102

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

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

Page Last Reviewed or Updated: 28-Mar-2014

The Military H&r Block

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