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2010 Form 1040

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2010 Form 1040

2010 form 1040 6. 2010 form 1040   Retail Tax on Heavy Trucks, Trailers, and Tractors Table of Contents Highway vehicle. 2010 form 1040 Vehicles not considered highway vehicles. 2010 form 1040 Idling reduction device. 2010 form 1040 Separate purchase. 2010 form 1040 Leases. 2010 form 1040 Exported vehicle. 2010 form 1040 Tax on resale of tax-paid trailers and semitrailers. 2010 form 1040 Use treated as sale. 2010 form 1040 Sale. 2010 form 1040 Long-term lease. 2010 form 1040 Short-term lease. 2010 form 1040 Related person. 2010 form 1040 Exclusions from tax base. 2010 form 1040 Sales not at arm's length. 2010 form 1040 Installment sales. 2010 form 1040 Repairs and modifications. 2010 form 1040 Further manufacture. 2010 form 1040 Rail trailers and rail vans. 2010 form 1040 Parts and accessories. 2010 form 1040 Trash containers. 2010 form 1040 House trailers. 2010 form 1040 Camper coaches or bodies for self-propelled mobile homes. 2010 form 1040 Farm feed, seed, and fertilizer equipment. 2010 form 1040 Ambulances and hearses. 2010 form 1040 Truck-tractors. 2010 form 1040 Concrete mixers. 2010 form 1040 Registration requirement. 2010 form 1040 Further manufacture. 2010 form 1040 A tax of 12% of the sales price is imposed on the first retail sale of the following articles, including related parts and accessories sold on or in connection with, or with the sale of, the articles. 2010 form 1040 Truck chassis and bodies. 2010 form 1040 Truck trailer and semitrailer chassis and bodies. 2010 form 1040 Tractors of the kind chiefly used for highway transportation in combination with a trailer or semitrailer. 2010 form 1040 A truck is a highway vehicle primarily designed to transport its load on the same chassis as the engine, even if it is equipped to tow a vehicle, such as a trailer or semitrailer. 2010 form 1040 A tractor is a highway vehicle designed to tow a vehicle, such as a trailer or semitrailer. 2010 form 1040 A tractor may carry incidental items of cargo when towing or limited amounts of cargo when not towing. 2010 form 1040 A sale of a truck, truck trailer, or semitrailer is considered a sale of a chassis and a body. 2010 form 1040 The seller is liable for the tax. 2010 form 1040 Chassis or body. 2010 form 1040   A chassis or body is taxable only if you sell it for use as a component part of a highway vehicle that is a truck, truck trailer or semitrailer, or a tractor of the kind chiefly used for highway transportation in combination with a trailer or semitrailer. 2010 form 1040 Highway vehicle. 2010 form 1040   A highway vehicle is any self-propelled vehicle designed to carry a load over public highways, whether or not it is also designed to perform other functions. 2010 form 1040 Examples of vehicles designed to carry a load over public highways are passenger automobiles, motorcycles, buses, and highway-type trucks and truck tractors. 2010 form 1040 A vehicle is a highway vehicle even though the vehicle's design allows it to perform a highway transportation function for only one of the following. 2010 form 1040 A particular type of load, such as passengers, furnishings, and personal effects (as in a house, office, or utility trailer). 2010 form 1040 A special kind of cargo, goods, supplies, or materials. 2010 form 1040 Some off-highway task unrelated to highway transportation, except as discussed next. 2010 form 1040 Vehicles not considered highway vehicles. 2010 form 1040   Generally, the following kinds of vehicles are not considered highway vehicles for purposes of the retail tax. 2010 form 1040 Specially designed mobile machinery for nontransportation functions. 2010 form 1040 A self-propelled vehicle is not a highway vehicle if all the following apply. 2010 form 1040 The chassis has permanently mounted to it machinery or equipment used to perform certain operations (construction, manufacturing, drilling, mining, timbering, processing, farming, or similar operations) if the operation of the machinery or equipment is unrelated to transportation on or off the public highways. 2010 form 1040 The chassis has been specially designed to serve only as a mobile carriage and mount (and power source, if applicable) for the machinery or equipment, whether or not the machinery or equipment is in operation. 2010 form 1040 The chassis could not, because of its special design and without substantial structural modification, be used as part of a vehicle designed to carry any other load. 2010 form 1040 Vehicles specially designed for off-highway transportation. 2010 form 1040 A vehicle is not treated as a highway vehicle if the vehicle is specially designed for the primary function of transporting a particular type of load other than over the public highway and because of this special design, the vehicles's capability to transport a load over a public highway is substantially limited or impaired. 2010 form 1040 To make this determination, you can take into account the vehicle's size, whether the vehicle is subject to licensing, safety, or other requirements, and whether the vehicle can transport a load at a sustained speed of at least 25 miles per hour. 2010 form 1040 It does not matter that the vehicle can carry heavier loads off highway than it is allowed to carry over the highway. 2010 form 1040 Nontransportation trailers and semitrailers. 2010 form 1040 A trailer or semitrailer is not treated as a highway vehicle if it is specially designed to function only as an enclosed stationary shelter for carrying on a nontransportation function at an off-highway site. 2010 form 1040 For example, a trailer that is capable only of functioning as an office for an off-highway construction operation is not a highway vehicle. 2010 form 1040 Gross vehicle weight. 2010 form 1040   The tax does not apply to truck chassis and bodies suitable for use with a vehicle that has a gross vehicle weight (defined below) of 33,000 pounds or less. 2010 form 1040 It also does not apply to truck trailer and semitrailer chassis and bodies suitable for use with a trailer or semitrailer that has a gross vehicle weight of 26,000 pounds or less. 2010 form 1040 Tractors that have a gross vehicle weight of 19,500 pounds or less and a gross combined weight of 33,000 pounds or less are excluded from the 12% retail tax. 2010 form 1040   The following four classifications of truck body types meet the suitable for use standard and will be excluded from the retail excise tax. 2010 form 1040 Platform truck bodies 21 feet or less in length. 2010 form 1040 Dry freight and refrigerated truck van bodies 24 feet or less in length. 2010 form 1040 Dump truck bodies with load capacities of 8 cubic yards or less. 2010 form 1040 Refuse packer truck bodies with load capacities of 20 cubic yards or less. 2010 form 1040 For more information on these classifications, see Revenue Procedure 2005-19, which is on page 832 of I. 2010 form 1040 R. 2010 form 1040 B. 2010 form 1040 2005-14 at www. 2010 form 1040 irs. 2010 form 1040 gov/pub/irs-irbs/irb05-14. 2010 form 1040 pdf. 2010 form 1040   The gross vehicle weight means the maximum total weight of a loaded vehicle. 2010 form 1040 Generally, this maximum total weight is the gross vehicle weight rating provided by the manufacturer or determined by the seller of the completed article. 2010 form 1040 The seller's gross vehicle weight rating is determined solely on the basis of the strength of the chassis frame and the axle capacity and placement. 2010 form 1040 The seller may not take into account any readily attachable components (such as tires or rim assemblies) in determining the gross vehicle weight. 2010 form 1040 See Regulations section 145. 2010 form 1040 4051-1(e)(3) for more information. 2010 form 1040 Parts or accessories. 2010 form 1040   The tax applies to parts or accessories sold on or in connection with, or with the sale of, a taxable article. 2010 form 1040 For example, if at the time of the sale by the retailer, the part or accessory has been ordered from the retailer, the part or accessory will be considered as sold in connection with the sale of the vehicle. 2010 form 1040 The tax applies in this case whether or not the retailer bills the parts or accessories separately. 2010 form 1040   If the retailer sells a taxable chassis, body, or tractor without parts or accessories considered essential for the operation or appearance of the taxable article, the sale of the parts or accessories by the retailer to the purchaser is considered made in connection with the sale of the taxable article even though they are shipped separately, at the same time, or on a different date. 2010 form 1040 The tax applies unless there is evidence to the contrary. 2010 form 1040 For example, if a retailer sells to any person a chassis and the bumpers for the chassis, or sells a taxable tractor and the fifth wheel and attachments, the tax applies to the parts or accessories regardless of the method of billing or the time at which the shipments were made. 2010 form 1040 The tax does not apply to parts and accessories that are spares or replacements. 2010 form 1040   The tax imposed on parts and accessories sold on or in connection with the taxable articles listed earlier and the tax imposed on the separate purchase of parts and accessories (discussed next) for the taxable articles listed earlier do not apply to an idling reduction device or insulation that has an R value of at least R35 per inch. 2010 form 1040 Idling reduction device. 2010 form 1040   An idling reduction device is any device or system of devices that provide the tractor with services, such as heat, air conditioning, and electricity, without the use of the main drive engine while the tractor is temporarily parked or stationary. 2010 form 1040 The device must be affixed to the tractor and determined by the Administrator of the EPA, in consultation with the Secretary of Energy and Secretary of Transportation, to reduce idling while parked or stationary. 2010 form 1040 The EPA discusses idling reduction technologies on its website at www. 2010 form 1040 epa. 2010 form 1040 gov/smartway/technology/idling. 2010 form 1040 htm. 2010 form 1040 Separate purchase. 2010 form 1040   The tax generally applies to the price of a part or accessory and its installation if the following conditions are met. 2010 form 1040 The owner, lessee, or operator of any vehicle that contains a taxable article installs any part or accessory on the vehicle. 2010 form 1040 The installation occurs within 6 months after the vehicle is first placed in service. 2010 form 1040   The owners of the trade or business installing the parts or accessories are secondarily liable for the tax. 2010 form 1040   A vehicle is placed in service on the date the owner takes actual possession of the vehicle. 2010 form 1040 This date is established by a signed delivery ticket or other comparable document indicating delivery to and acceptance by the owner. 2010 form 1040   The tax does not apply if the installed part or accessory is a replacement part or accessory. 2010 form 1040 The tax also does not apply if the total price of the parts and accessories, including installation charges, during the 6-month period is $1,000 or less. 2010 form 1040 However, if the total price is more than $1,000, the tax applies to the cost of all parts and accessories (and installation charges) during that period. 2010 form 1040 Example. 2010 form 1040 You bought a taxable vehicle and placed it in service on April 8. 2010 form 1040 On May 3, you bought and installed parts and accessories at a cost of $850. 2010 form 1040 On July 15, you bought and installed parts and accessories for $300. 2010 form 1040 Tax of $138 (12% of $1,150) applies on July 15. 2010 form 1040 Also, tax will apply to any costs of additional parts and accessories installed on the vehicle before October 8. 2010 form 1040 First retail sale defined. 2010 form 1040   The sale of an article is treated as the first retail sale, and the seller will be liable for the tax imposed on the sale unless one of the following exceptions applies. 2010 form 1040 There has been a prior taxable sale, lease, or use of the article (however, see Tax on resale of tax-paid trailers and semitrailers, later). 2010 form 1040 The sale qualifies as a tax-free sale under section 4221 (see Sales exempt from tax, later). 2010 form 1040 The seller in good faith accepts from the purchaser a statement signed under penalties of perjury and executed in good faith that the purchaser intends to resell the article or lease it on a long-term basis. 2010 form 1040 There is no registration requirement. 2010 form 1040 Leases. 2010 form 1040   A long-term lease (a lease with a term of 1 year or more, taking into account options to renew) before a first retail sale is treated as a taxable sale. 2010 form 1040 The tax is imposed on the lessor at the time of the lease. 2010 form 1040   A short-term lease (a lease with a term of less than 1 year, taking into account options to renew) before a first retail sale is treated as a taxable use. 2010 form 1040 The tax is imposed on the lessor at the time of the lease. 2010 form 1040 Exported vehicle. 2010 form 1040   A vehicle exported before its first retail sale, used in a foreign country, and then returned to the United States is subject to the retail tax on its first domestic use or retail sale after importation. 2010 form 1040 Tax on resale of tax-paid trailers and semitrailers. 2010 form 1040   The tax applies to a trailer or semitrailer resold within 6 months after having been sold in a taxable sale. 2010 form 1040 The seller liable for the tax on the resale can claim a credit equal to the tax paid on the prior taxable sale. 2010 form 1040 The credit cannot exceed the tax on the resale. 2010 form 1040 See Regulations section 145. 2010 form 1040 4052-1(a)(4) for information on the conditions to allowance for the credit. 2010 form 1040 Use treated as sale. 2010 form 1040   If any person uses a taxable article before the first retail sale of the article, that person is liable for the tax as if the article had been sold at retail by that person. 2010 form 1040 Figure the tax on the price at which similar articles are sold in the ordinary course of trade by retailers. 2010 form 1040 The tax attaches when the use begins. 2010 form 1040   If the seller of an article regularly sells the articles at retail in arm's-length transactions, figure the tax on its use on the lowest established retail price for the articles in effect at the time of the taxable use. 2010 form 1040   If the seller of an article does not regularly sell the articles at retail in arm's-length transactions, a constructive price on which the tax is figured will be determined by the IRS after considering the selling practices and price structures of sellers of similar articles. 2010 form 1040   If a seller of an article incurs liability for tax on the use of the article and later sells or leases the article in a transaction that otherwise would be taxable, liability for tax is not incurred on the later sale or lease. 2010 form 1040 Presumptive retail sales price. 2010 form 1040   There are rules to ensure that the tax base of transactions considered to be taxable sales includes either an actual or presumed markup percentage. 2010 form 1040 If the person liable for tax is the vehicle's manufacturer, producer, or importer, the following discussions show how you figure the presumptive retail sales price depending on the type of transaction and the persons involved in the transaction. 2010 form 1040 Table 6-1 outlines the appropriate tax base calculation for various transactions. 2010 form 1040   The presumed markup percentage to be used for trucks and truck-tractors is 4%. 2010 form 1040 But for truck trailers and semitrailers and remanufactured trucks and tractors, the presumed markup percentage is zero. 2010 form 1040 Sale. 2010 form 1040   For a taxable sale by a manufacturer, producer, importer, or related person, you generally figure the tax on a tax base of the sales price plus an amount equal to the presumed markup percentage times that sales price. 2010 form 1040 Long-term lease. 2010 form 1040   In the case of a long-term lease by a manufacturer, producer, importer, or related person, figure the tax on a tax base of the constructive sales price plus an amount equal to the presumed markup percentage times the constructive sales price. 2010 form 1040 Short-term lease. 2010 form 1040   When a manufacturer, producer, importer, or related person leases an article in a short-term lease considered a taxable use, figure the tax on a constructive sales price at which those or similar articles generally are sold in the ordinary course of trade by retailers. 2010 form 1040   But if the lessor in this situation regularly sells articles at retail in arm's-length transactions, figure the tax on the lowest established retail price in effect at the time of the taxable use. 2010 form 1040   If a person other than the manufacturer, producer, importer, or related person leases an article in a short-term lease considered a taxable use, figure the tax on a tax base of the price for which the article was sold to the lessor plus the cost of parts and accessories installed by the lessor and a presumed markup percentage. 2010 form 1040 Related person. 2010 form 1040   A related person is any member of the same controlled group as the manufacturer, producer, or importer. 2010 form 1040 Do not treat as a related person a person that sells the articles through a permanent retail establishment in the normal course of being a retailer if that person has records to prove the article was sold for a price that included a markup equal to or greater than the presumed markup percentage. 2010 form 1040 Table 6-1. 2010 form 1040 Tax Base IF the transaction is a. 2010 form 1040 . 2010 form 1040 . 2010 form 1040 THEN figuring the base by using the. 2010 form 1040 . 2010 form 1040 . 2010 form 1040 Sale by the manufacturer, producer, importer, or related person Sales price plus (presumed markup percentage × sales price) Sale by the dealer Total consideration paid for the item including any charges incident to placing it in a condition ready for use Long-term lease by the manufacturer, producer, importer, or related person Constructive sales price plus (presumed markup percentage × constructive sales price) Short-term lease by the manufacturer, producer, importer, or related person Constructive sales price at which such or similar articles are sold Short-term lease by a lessor other than the manufacturer, producer, importer, or related person Price for which the article was sold to the lessor plus the cost of parts and accessories installed by the lessor plus a presumed markup percentage Short-term lease where the articles are regularly sold at arm's length Lowest established retail price in effect at the time of the taxable use General rule for sales by dealers to the consumer. 2010 form 1040   For a taxable sale, other than a long-term lease, by a person other than a manufacturer, producer, importer, or related person, your tax base is the retail sales price as discussed next under Determination of tax base. 2010 form 1040   When you sell an article to the consumer, generally you do not add a presumed markup to the tax base. 2010 form 1040 However, you do add a markup if all the following apply. 2010 form 1040 You do not perform any significant activities relating to the processing of the sale of a taxable article. 2010 form 1040 The main reason for processing the sale through you is to avoid or evade the presumed markup. 2010 form 1040 You do not have records proving that the article was sold for a price that included a markup equal to or greater than the presumed markup percentage. 2010 form 1040 In these situations, your tax base is the sales price plus an amount equal to the presumed markup percentage times that selling price. 2010 form 1040 Determination of tax base. 2010 form 1040   These rules apply to both normal retail sales price and presumptive retail sales price computations. 2010 form 1040 To arrive at the tax base, the price is the total consideration paid (including trade-in allowance) for the item and includes any charge incident to placing the article in a condition ready for use. 2010 form 1040 However, see Presumptive retail sales price, earlier. 2010 form 1040 Exclusions from tax base. 2010 form 1040   Exclude from the tax base the retail excise tax imposed on the sale. 2010 form 1040 Exclude any state or local retail sales tax if stated as a separate charge from the price whether the sales tax is imposed on the seller or purchaser. 2010 form 1040 Also exclude the value of any used component of the article furnished by the first user of the article. 2010 form 1040   Exclude charges for transportation, delivery, insurance, and installation (other than installation charges for parts and accessories, discussed earlier) and other expenses incurred in connection with the delivery of an article to a purchaser. 2010 form 1040 These expenses are those incurred in delivery from the retail dealer to the customer. 2010 form 1040 In the case of delivery directly from the manufacturer to the dealer's customer, include the transportation and delivery charges to the extent the charges do not exceed what it would have cost to ship the article to the dealer. 2010 form 1040   Exclude amounts charged for machinery or equipment that does not contribute to the highway transportation function of the vehicle, provided those charges are supported by adequate records. 2010 form 1040 For example, for an industrial vacuum loader vehicle, exclude amounts charged for the vacuum pump and hose, filter system, material separator, silencer or muffler, control cabinet, and ladder. 2010 form 1040 Similarly, for a sewer cleaning vehicle, exclude amounts charged for the high pressure water pump, hose components, and the vacuum pipe. 2010 form 1040 Sales not at arm's length. 2010 form 1040   For any taxable article sold (not at arm's length) at less than the fair market price, figure the excise tax on the price for which similar articles are sold at retail in the ordinary course of trade. 2010 form 1040   A sale is not at arm's length if either of the following apply. 2010 form 1040 One of the parties is controlled (in law or in fact) by the other or there is common control, whether or not the control is actually exercised to influence the sales price. 2010 form 1040 The sale is made under special arrangements between a seller and a purchaser. 2010 form 1040 Installment sales. 2010 form 1040   If the first retail sale is an installment sale, or other form of sale in which the sales price is paid in installments, tax liability arises at the time of the sale. 2010 form 1040 The tax is figured on the entire sales price. 2010 form 1040 No part of the tax is deferred because the sales price is paid in installments. 2010 form 1040 Repairs and modifications. 2010 form 1040   The tax does not apply to the sale or use of an article that has been repaired or modified unless the cost of the repairs and modifications is more than 75% of the retail price of a comparable new article. 2010 form 1040 This includes modifications that change the transportation function of an article or restore a wrecked article to a functional condition. 2010 form 1040 However, this exception generally does not apply to an article that was not subject to the tax when it was new. 2010 form 1040 Further manufacture. 2010 form 1040   The tax does not apply to the use by a person of a taxable article as material in the manufacture or production of, or as a component part of, another article to be manufactured or produced by that person. 2010 form 1040 Do not treat a person as engaged in the manufacture of any article merely because that person combines the article with a: Coupling device (including any fifth wheel); Wrecker crane; Loading and unloading equipment (including any crane, hoist, winch, or power liftgate); Aerial ladder or tower; Ice and snow control equipment; Earth moving, excavation, and construction equipment; Spreader; Sleeper cab; Cab shield; or Wood or metal floor. 2010 form 1040 Combining an article with an item in this list does not give rise to taxability. 2010 form 1040 However, see Parts or accessories discussed earlier. 2010 form 1040 Articles exempt from tax. 2010 form 1040   The tax on heavy trucks, trailers, and tractors does not apply to sales of the articles described in the following discussions. 2010 form 1040 Rail trailers and rail vans. 2010 form 1040   This is any chassis or body of a trailer or semitrailer designed for use both as a highway vehicle and a railroad car (including any parts and accessories designed primarily for use on and in connection with it). 2010 form 1040 Do not treat a piggyback trailer or semitrailer as designed for use as a railroad car. 2010 form 1040 Parts and accessories. 2010 form 1040   This is any part or accessory sold separately from the truck or trailer, except as described earlier under Parts or accessories and Separate purchase. 2010 form 1040 Trash containers. 2010 form 1040   This is any box, container, receptacle, bin, or similar article that meets all the following conditions. 2010 form 1040 It is designed to be used as a trash container. 2010 form 1040 It is not designed to carry freight other than trash. 2010 form 1040 It is not designed to be permanently mounted on or affixed to a truck chassis or body. 2010 form 1040 House trailers. 2010 form 1040   This is any house trailer (regardless of size) suitable for use in connection with either passenger automobiles or trucks. 2010 form 1040 Camper coaches or bodies for self-propelled mobile homes. 2010 form 1040   This is any article designed to be mounted or placed on trucks, truck chassis, or automobile chassis and to be used primarily as living quarters or camping accommodations. 2010 form 1040 Further, the tax does not apply to chassis specifically designed and constructed to accommodate and transport self-propelled mobile home bodies. 2010 form 1040 Farm feed, seed, and fertilizer equipment. 2010 form 1040   This is any body primarily designed to process or prepare, haul, spread, load, or unload feed, seed, or fertilizer to or on farms. 2010 form 1040 This exemption applies only to the farm equipment body (and parts and accessories) and not to the chassis upon which the farm equipment is mounted. 2010 form 1040 Ambulances and hearses. 2010 form 1040   This is any ambulance, hearse, or combination ambulance-hearse. 2010 form 1040 Truck-tractors. 2010 form 1040   This is any truck-tractor specifically designed for use in shifting semitrailers in and around freight yards and freight terminals. 2010 form 1040 Concrete mixers. 2010 form 1040   This is any article designed to be placed or mounted on a truck, truck trailer, or semitrailer chassis to be used to process or prepare concrete. 2010 form 1040 This exemption does not apply to the chassis on which the article is mounted. 2010 form 1040 Sales exempt from tax. 2010 form 1040   The following sales are ordinarily exempt from tax. 2010 form 1040 Sales to a state or local government for its exclusive use. 2010 form 1040 Sales to Indian tribal governments, but only if the transaction involves the exercise of an essential tribal government function. 2010 form 1040 Sales to a nonprofit educational organization for its exclusive use. 2010 form 1040 Sales to a qualified blood collector organization (as defined under Communications Tax in chapter 4) for its exclusive use in the collection, storage, or transportation of blood. 2010 form 1040 Sales for use by the purchaser for further manufacture of other taxable articles (see below). 2010 form 1040 Sales for export or for resale by the purchaser to a second purchaser for export. 2010 form 1040 Sales to the United Nations for official use. 2010 form 1040 Registration requirement. 2010 form 1040   In general, the seller and buyer must be registered for a sale to be tax free. 2010 form 1040 See the Form 637 instructions for more information. 2010 form 1040 Certain registration exceptions apply in the case of sales to state and local governments, sales to foreign purchasers for export, and sales for resale or long term leasing. 2010 form 1040 Further manufacture. 2010 form 1040   If you buy articles tax free and resell or use them other than in the manufacture of another article, you are liable for the tax on their resale or use just as if you had manufactured and made the first retail sale of them. 2010 form 1040 Credits or refunds. 2010 form 1040   A credit or refund (without interest) of the retail tax on the taxable articles described earlier may be allowable if the tax has been paid with respect to an article and, before any other use, such article is used by any person as a component part of another taxable article manufactured or produced. 2010 form 1040 The person using the article as a component part is eligible for the credit or refund. 2010 form 1040   A credit or refund is allowable if, before any other use, an article is, by any person: Exported, Used or sold for use as supplies for vessels, Sold to a state or local government for its exclusive use, Sold to a nonprofit educational organization for its exclusive use, or Sold to a qualified blood collector organization (as defined under Communications Tax in chapter 4) for its exclusive use in the collection, storage, or transportation of blood. 2010 form 1040 A credit or refund is also allowable if there is a price readjustment by reason of the return or repossession of an article or by reason of a bona fide discount, rebate, or allowance. 2010 form 1040   See also Conditions to allowance in chapter 5. 2010 form 1040 Tire credit. 2010 form 1040   A credit is allowed against the retail tax on the taxable articles described earlier if taxable tires are sold on or in connection with the sale of the article. 2010 form 1040 The credit is equal to the manufacturers excise tax imposed on the taxable tires (discussed earlier). 2010 form 1040 This is the section 4051(d) taxable tire credit and is claimed on Schedule C (Form 720) for the same quarter for which the tax on the heavy vehicle is reported. 2010 form 1040 Prev  Up  Next   Home   More Online Publications
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The 2010 Form 1040

2010 form 1040 5. 2010 form 1040   Personal Use of Dwelling Unit (Including Vacation Home) Table of Contents Dividing Expenses Dwelling Unit Used as a HomeMain home. 2010 form 1040 Shared equity financing agreement. 2010 form 1040 Donation of use of the property. 2010 form 1040 Examples. 2010 form 1040 Days used for repairs and maintenance. 2010 form 1040 Days used as a main home before or after renting. 2010 form 1040 Reporting Income and DeductionsNot used as a home. 2010 form 1040 Used as a home but rented less than 15 days. 2010 form 1040 Used as a home and rented 15 days or more. 2010 form 1040 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. 2010 form 1040 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. 2010 form 1040 Only your rental expenses may deducted on Schedule E (Form 1040). 2010 form 1040 Some of your personal expenses may be deductible if you itemize your deductions on Schedule A (Form 1040). 2010 form 1040 You must also determine if the dwelling unit is considered a home. 2010 form 1040 The amount of rental expenses that you can deduct may be limited if the dwelling unit is considered a home. 2010 form 1040 Whether a dwelling unit is considered a home depends on how many days during the year are considered to be days of personal use. 2010 form 1040 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. 2010 form 1040 Dwelling unit. 2010 form 1040   A dwelling unit includes a house, apartment, condominium, mobile home, boat, vacation home, or similar property. 2010 form 1040 It also includes all structures or other property belonging to the dwelling unit. 2010 form 1040 A dwelling unit has basic living accommodations, such as sleeping space, a toilet, and cooking facilities. 2010 form 1040   A dwelling unit does not include property (or part of the property) used solely as a hotel, motel, inn, or similar establishment. 2010 form 1040 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. 2010 form 1040 Example. 2010 form 1040 You rent a room in your home that is always available for short-term occupancy by paying customers. 2010 form 1040 You do not use the room yourself and you allow only paying customers to use the room. 2010 form 1040 This room is used solely as a hotel, motel, inn, or similar establishment and is not a dwelling unit. 2010 form 1040 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. 2010 form 1040 When dividing your expenses, follow these rules. 2010 form 1040 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. 2010 form 1040 (This rule does not apply when determining whether you used the unit as a home. 2010 form 1040 ) Any day that the unit is available for rent but not actually rented is not a day of rental use. 2010 form 1040 Fair rental price. 2010 form 1040   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. 2010 form 1040 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. 2010 form 1040   Ask yourself the following questions when comparing another property with yours. 2010 form 1040 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. 2010 form 1040 Example. 2010 form 1040 Your beach cottage was available for rent from June 1 through August 31 (92 days). 2010 form 1040 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. 2010 form 1040 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. 2010 form 1040 Your family also used the cottage during the last 2 weeks of May (14 days). 2010 form 1040 The cottage was not used at all before May 17 or after August 31. 2010 form 1040 You figure the part of the cottage expenses to treat as rental expenses as follows. 2010 form 1040 The cottage was used for rental a total of 85 days (92 − 7). 2010 form 1040 The days it was available for rent but not rented (7 days) are not days of rental use. 2010 form 1040 The July weekend (2 days) you used it is rental use because you received a fair rental price for the weekend. 2010 form 1040 You used the cottage for personal purposes for 14 days (the last 2 weeks in May). 2010 form 1040 The total use of the cottage was 99 days (14 days personal use + 85 days rental use). 2010 form 1040 Your rental expenses are 85/99 (86%) of the cottage expenses. 2010 form 1040 Note. 2010 form 1040 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. 2010 form 1040 Therefore, you had 16 days of personal use and 83 days of rental use for this purpose. 2010 form 1040 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. 2010 form 1040 If you have a net loss, you may not be able to deduct all of the rental expenses. 2010 form 1040 See Dwelling Unit Used as a Home, next. 2010 form 1040 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. 2010 form 1040 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. 2010 form 1040 See What is a day of personal use , later. 2010 form 1040 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. 2010 form 1040 Instead, count it as a day of personal use in applying both (1) and (2) above. 2010 form 1040 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. 2010 form 1040 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). 2010 form 1040 However, see Days used as a main home before or after renting , later. 2010 form 1040 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. 2010 form 1040 Family includes only your spouse, brothers and sisters, half-brothers and half-sisters, ancestors (parents, grandparents, etc. 2010 form 1040 ), and lineal descendants (children, grandchildren, etc. 2010 form 1040 ). 2010 form 1040 Anyone under an arrangement that lets you use some other dwelling unit. 2010 form 1040 Anyone at less than a fair rental price. 2010 form 1040 Main home. 2010 form 1040   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. 2010 form 1040 Shared equity financing agreement. 2010 form 1040   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. 2010 form 1040 Donation of use of the property. 2010 form 1040   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. 2010 form 1040 Examples. 2010 form 1040   The following examples show how to determine if you have days of personal use. 2010 form 1040 Example 1. 2010 form 1040 You and your neighbor are co-owners of a condominium at the beach. 2010 form 1040 Last year, you rented the unit to vacationers whenever possible. 2010 form 1040 The unit was not used as a main home by anyone. 2010 form 1040 Your neighbor used the unit for 2 weeks last year; you did not use it at all. 2010 form 1040 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. 2010 form 1040 Example 2. 2010 form 1040 You and your neighbors are co-owners of a house under a shared equity financing agreement. 2010 form 1040 Your neighbors live in the house and pay you a fair rental price. 2010 form 1040 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. 2010 form 1040 This is because your neighbors rent the house as their main home under a shared equity financing agreement. 2010 form 1040 Example 3. 2010 form 1040 You own a rental property that you rent to your son. 2010 form 1040 Your son does not own any interest in this property. 2010 form 1040 He uses it as his main home and pays you a fair rental price. 2010 form 1040 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. 2010 form 1040 Example 4. 2010 form 1040 You rent your beach house to Rosa. 2010 form 1040 Rosa rents her cabin in the mountains to you. 2010 form 1040 You each pay a fair rental price. 2010 form 1040 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. 2010 form 1040 Example 5. 2010 form 1040 You rent an apartment to your mother at less than a fair rental price. 2010 form 1040 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. 2010 form 1040 Days used for repairs and maintenance. 2010 form 1040   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. 2010 form 1040 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. 2010 form 1040 Example. 2010 form 1040 Corey owns a cabin in the mountains that he rents for most of the year. 2010 form 1040 He spends a week at the cabin with family members. 2010 form 1040 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. 2010 form 1040 Corey's family members, however, work substantially full time on the cabin each day during the week. 2010 form 1040 The main purpose of being at the cabin that week is to do maintenance work. 2010 form 1040 Therefore, the use of the cabin during the week by Corey and his family will not be considered personal use by Corey. 2010 form 1040 Days used as a main home before or after renting. 2010 form 1040   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. 2010 form 1040 Do not count them as days of personal use if: You rented or tried to rent the property for 12 or more consecutive months. 2010 form 1040 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. 2010 form 1040 However, this special rule does not apply when dividing expenses between rental and personal use. 2010 form 1040 See Property Changed to Rental Use in chapter 4. 2010 form 1040 Example 1. 2010 form 1040 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. 2010 form 1040 You rented your house at a fair rental price from March 15, 2012, to May 14, 2013 (14 months). 2010 form 1040 On June 1, 2013, you moved back into your old house. 2010 form 1040 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. 2010 form 1040 Therefore, you would use the rules in chapter 1 when figuring your rental income and expenses. 2010 form 1040 Example 2. 2010 form 1040 On January 31, you moved out of the condominium where you had lived for 3 years. 2010 form 1040 You offered it for rent at a fair rental price beginning on February 1. 2010 form 1040 You were unable to rent it until April. 2010 form 1040 On September 15, you sold the condominium. 2010 form 1040 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. 2010 form 1040 Examples. 2010 form 1040   The following examples show how to determine whether you used your rental property as a home. 2010 form 1040 Example 1. 2010 form 1040 You converted the basement of your home into an apartment with a bedroom, a bathroom, and a small kitchen. 2010 form 1040 You rented the basement apartment at a fair rental price to college students during the regular school year. 2010 form 1040 You rented to them on a 9-month lease (273 days). 2010 form 1040 You figured 10% of the total days rented to others at a fair rental price is 27 days. 2010 form 1040 During June (30 days), your brothers stayed with you and lived in the basement apartment rent free. 2010 form 1040 Your basement apartment was used as a home because you used it for personal purposes for 30 days. 2010 form 1040 Rent-free use by your brothers is considered personal use. 2010 form 1040 Your personal use (30 days) is more than the greater of 14 days or 10% of the total days it was rented (27 days). 2010 form 1040 Example 2. 2010 form 1040 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). 2010 form 1040 Your sister-in-law stayed in the room, rent free, for the last 3 weeks (21 days) in July. 2010 form 1040 You figured 10% of the total days rented to others at a fair rental price is 3 days. 2010 form 1040 The room was used as a home because you used it for personal purposes for 21 days. 2010 form 1040 That is more than the greater of 14 days or 10% of the 27 days it was rented (3 days). 2010 form 1040 Example 3. 2010 form 1040 You own a condominium apartment in a resort area. 2010 form 1040 You rented it at a fair rental price for a total of 170 days during the year. 2010 form 1040 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. 2010 form 1040 Your family actually used the apartment for 10 of those days. 2010 form 1040 Therefore, the apartment is treated as having been rented for 160 (170 – 10) days. 2010 form 1040 You figured 10% of the total days rented to others at a fair rental price is 16 days. 2010 form 1040 Your family also used the apartment for 7 other days during the year. 2010 form 1040 You used the apartment as a home because you used it for personal purposes for 17 days. 2010 form 1040 That is more than the greater of 14 days or 10% of the 160 days it was rented (16 days). 2010 form 1040 Minimal rental use. 2010 form 1040   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. 2010 form 1040 See Used as a home but rented less than 15 days, later, for more information. 2010 form 1040 Limit on deductions. 2010 form 1040   Renting a dwelling unit that is considered a home is not a passive activity. 2010 form 1040 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. 2010 form 1040 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. 2010 form 1040 Any expenses carried forward to the next year will be subject to any limits that apply for that year. 2010 form 1040 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. 2010 form 1040   To figure your deductible rental expenses for this year and any carryover to next year, use Worksheet 5–1. 2010 form 1040 Reporting Income and Deductions Property not used for personal purposes. 2010 form 1040   If you do not use a dwelling unit for personal purposes, see chapter 3 for how to report your rental income and expenses. 2010 form 1040 Property used for personal purposes. 2010 form 1040   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. 2010 form 1040 Not used as a home. 2010 form 1040   If you use a dwelling unit for personal purposes, but not as a home, report all the rental income in your income. 2010 form 1040 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 . 2010 form 1040 The expenses for personal use are not deductible as rental expenses. 2010 form 1040   Your deductible rental expenses can be more than your gross rental income; however, see Limits on Rental Losses in chapter 3. 2010 form 1040 Used as a home but rented less than 15 days. 2010 form 1040   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). 2010 form 1040 You are not required to report the rental income and rental expenses from this activity. 2010 form 1040 The expenses, including qualified mortgage interest, property taxes, and any qualified casualty loss will be reported as normally allowed on Schedule A (Form 1040). 2010 form 1040 See the Instructions for Schedule A (Form 1040) for more information on deducting these expenses. 2010 form 1040 Used as a home and rented 15 days or more. 2010 form 1040   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. 2010 form 1040 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 . 2010 form 1040 The expenses for personal use are not deductible as rental expenses. 2010 form 1040   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. 2010 form 1040 You do not need to use Worksheet 5-1. 2010 form 1040   However, if you had a net loss from renting the dwelling unit for the year, your deduction for certain rental expenses is limited. 2010 form 1040 To figure your deductible rental expenses and any carryover to next year, use Worksheet 5–1. 2010 form 1040 Worksheet 5-1. 2010 form 1040 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. 2010 form 1040 Did you use the dwelling unit as a home this year? (See Dwelling Unit Used as a Home . 2010 form 1040 ) 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. 2010 form 1040 Rental Use Percentage A. 2010 form 1040 Total days available for rent at fair rental price A. 2010 form 1040       B. 2010 form 1040 Total days available for rent (line A) but not rented B. 2010 form 1040       C. 2010 form 1040 Total days of rental use. 2010 form 1040 Subtract line B from line A C. 2010 form 1040       D. 2010 form 1040 Total days of personal use (including days rented at less than fair rental price) D. 2010 form 1040       E. 2010 form 1040 Total days of rental and personal use. 2010 form 1040 Add lines C and D E. 2010 form 1040       F. 2010 form 1040 Percentage of expenses allowed for rental. 2010 form 1040 Divide line C by line E     F. 2010 form 1040 . 2010 form 1040 PART II. 2010 form 1040 Allowable Rental Expenses 1. 2010 form 1040 Enter rents received 1. 2010 form 1040   2a. 2010 form 1040 Enter the rental portion of deductible home mortgage interest and qualified mortgage insurance premiums (see instructions) 2a. 2010 form 1040       b. 2010 form 1040 Enter the rental portion of real estate taxes b. 2010 form 1040       c. 2010 form 1040 Enter the rental portion of deductible casualty and theft losses (see instructions) c. 2010 form 1040       d. 2010 form 1040 Enter direct rental expenses (see instructions) d. 2010 form 1040       e. 2010 form 1040 Fully deductible rental expenses. 2010 form 1040 Add lines 2a–2d. 2010 form 1040 Enter here and  on the appropriate lines on Schedule E (see instructions) 2e. 2010 form 1040   3. 2010 form 1040 Subtract line 2e from line 1. 2010 form 1040 If zero or less, enter -0- 3. 2010 form 1040   4a. 2010 form 1040 Enter the rental portion of expenses directly related to operating or maintaining  the dwelling unit (such as repairs, insurance, and utilities) 4a. 2010 form 1040       b. 2010 form 1040 Enter the rental portion of excess mortgage interest and qualified mortgage insurance premiums (see instructions) b. 2010 form 1040       c. 2010 form 1040 Carryover of operating expenses from 2012 worksheet c. 2010 form 1040       d. 2010 form 1040 Add lines 4a–4c d. 2010 form 1040       e. 2010 form 1040 Allowable expenses. 2010 form 1040 Enter the smaller of line 3 or line 4d (see instructions) 4e. 2010 form 1040   5. 2010 form 1040 Subtract line 4e from line 3. 2010 form 1040 If zero or less, enter -0- 5. 2010 form 1040   6a. 2010 form 1040 Enter the rental portion of excess casualty and theft losses (see instructions) 6a. 2010 form 1040       b. 2010 form 1040 Enter the rental portion of depreciation of the dwelling unit b. 2010 form 1040       c. 2010 form 1040 Carryover of excess casualty losses and depreciation from 2012 worksheet c. 2010 form 1040       d. 2010 form 1040 Add lines 6a–6c d. 2010 form 1040       e. 2010 form 1040 Allowable excess casualty and theft losses and depreciation. 2010 form 1040 Enter the smaller of  line 5 or line 6d (see instructions) 6e. 2010 form 1040   PART III. 2010 form 1040 Carryover of Unallowed Expenses to Next Year 7a. 2010 form 1040 Operating expenses to be carried over to next year. 2010 form 1040 Subtract line 4e from line 4d 7a. 2010 form 1040   b. 2010 form 1040 Excess casualty and theft losses and depreciation to be carried over to next year. 2010 form 1040  Subtract line 6e from line 6d b. 2010 form 1040   Worksheet 5-1 Instructions. 2010 form 1040 Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Caution. 2010 form 1040 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. 2010 form 1040 Line 2a. 2010 form 1040 Figure the mortgage interest on the dwelling unit that you could deduct on Schedule A as if you had not rented the unit. 2010 form 1040 Do not include interest on a loan that did not benefit the dwelling unit. 2010 form 1040 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. 2010 form 1040 Include interest on a loan used to buy, build, or improve the dwelling unit, or to refinance such a loan. 2010 form 1040 Include the rental portion of this interest in the total you enter on line 2a of the worksheet. 2010 form 1040   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. 2010 form 1040 See the Schedule A instructions. 2010 form 1040 However, figure your adjusted gross income (Form 1040, line 38) without your rental income and expenses from the dwelling unit. 2010 form 1040 See Line 4b to deduct the part of the qualified mortgage insurance premiums not allowed because of the adjusted gross income limit. 2010 form 1040 Include the rental portion of the amount from Schedule A, line 13, in the total you enter on line 2a of the worksheet. 2010 form 1040   Note. 2010 form 1040 Do not file this Schedule A or use it to figure the amount to deduct on line 13 of that schedule. 2010 form 1040 Instead, figure the personal portion on a separate Schedule A. 2010 form 1040 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. 2010 form 1040           Line 2c. 2010 form 1040 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. 2010 form 1040 To do this, complete Section A of Form 4684, Casualties and Thefts, treating the losses as personal losses. 2010 form 1040 If any of the loss is due to a federally declared disaster, see the Instructions for Form 4684. 2010 form 1040 On Form 4684, line 17, enter 10% of your adjusted gross income figured without your rental income and expenses from the dwelling unit. 2010 form 1040 Enter the rental portion of the result from Form 4684, line 18, on line 2c of this worksheet. 2010 form 1040   Note. 2010 form 1040 Do not file this Form 4684 or use it to figure your personal losses on Schedule A. 2010 form 1040 Instead, figure the personal portion on a separate Form 4684. 2010 form 1040           Line 2d. 2010 form 1040 Enter the total of your rental expenses that are directly related only to the rental activity. 2010 form 1040 These include interest on loans used for rental activities other than to buy, build, or improve the dwelling unit. 2010 form 1040 Also include rental agency fees, advertising, office supplies, and depreciation on office equipment used in your rental activity. 2010 form 1040           Line 2e. 2010 form 1040 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. 2010 form 1040 Enter the amounts on lines 2a, 2b, 2c, and 2d on the appropriate lines of Schedule E. 2010 form 1040           Line 4b. 2010 form 1040 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. 2010 form 1040 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. 2010 form 1040 Do not include interest on a loan that did not benefit the dwelling unit  (as explained in the line 2a instructions). 2010 form 1040           Line 4e. 2010 form 1040 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. 2010 form 1040 *           Line 6a. 2010 form 1040 To find the rental portion of excess casualty and theft losses, use the Form 4684 you prepared for line 2c of this worksheet. 2010 form 1040   A. 2010 form 1040 Enter the amount from Form 4684, line 10       B. 2010 form 1040 Enter the rental portion of line A       C. 2010 form 1040 Enter the amount from line 2c of this worksheet       D. 2010 form 1040 Subtract line C from line B. 2010 form 1040 Enter the result here and on line 6a of this worksheet               Line 6e. 2010 form 1040 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. 2010 form 1040 * *Allocating the limited deduction. 2010 form 1040 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. 2010 form 1040 Enter the amount you allocate to each expense on the appropriate line of Schedule E, Part I. 2010 form 1040 Prev  Up  Next   Home   More Online Publications