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2011 Tax Filing

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2011 Tax Filing

2011 tax filing 2. 2011 tax filing   Withholding Tax Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Income Tax Withholding Statement. 2011 tax filing 30% Flat Rate Withholding Social Security and Medicare TaxesGeneral Information Bilateral Social Security (Totalization) Agreements Topics - This chapter discusses: Withholding income tax from the pay of U. 2011 tax filing S. 2011 tax filing citizens, Withholding tax at a flat rate, and Social security and Medicare taxes. 2011 tax filing Useful Items - You may want to see: Publication 505 Tax Withholding and Estimated Tax Form (and Instructions) 673 Statement For Claiming Exemption From Withholding on Foreign Earned Income Eligible for the Exclusion Provided by Section 911 W-4 Employee's Withholding Allowance Certificate W-9 Request for Taxpayer Identification Number and Certification See chapter 7 for information about getting this publication and these forms. 2011 tax filing Income Tax Withholding U. 2011 tax filing S. 2011 tax filing employers generally must withhold U. 2011 tax filing S. 2011 tax filing income tax from the pay of U. 2011 tax filing S. 2011 tax filing citizens working abroad unless the employer is required by foreign law to withhold foreign income tax. 2011 tax filing Foreign earned income exclusion. 2011 tax filing   Your employer does not have to withhold U. 2011 tax filing S. 2011 tax filing income taxes from wages you earn abroad if it is reasonable to believe that you will exclude them from income under the foreign earned income exclusion or the foreign housing exclusion. 2011 tax filing   Your employer should withhold taxes from any wages you earn for working in the United States. 2011 tax filing Statement. 2011 tax filing   You can give a statement to your employer indicating that you expect to qualify for the foreign earned income exclusion under either the bona fide residence test or the physical presence test and indicating your estimated housing cost exclusion. 2011 tax filing   Form 673 is an acceptable statement. 2011 tax filing You can use Form 673 only if you are a U. 2011 tax filing S. 2011 tax filing citizen. 2011 tax filing You do not have to use the form. 2011 tax filing You can prepare your own statement. 2011 tax filing See a copy of Form 673, later. 2011 tax filing   Generally, your employer can stop the withholding once you submit the statement that includes a declaration that the statement is made under penalties of perjury. 2011 tax filing However, if your employer has reason to believe that you will not qualify for either the foreign earned income or the foreign housing exclusion, your employer must continue to withhold. 2011 tax filing   In determining whether your foreign earned income is more than the limit on either the foreign earned income exclusion or the foreign housing exclusion, if your employer has any information about pay you received from any other source outside the United States, your employer must take that information into account. 2011 tax filing Foreign tax credit. 2011 tax filing   If you plan to take a foreign tax credit, you may be eligible for additional withholding allowances on Form W-4. 2011 tax filing You can take these additional withholding allowances only for foreign tax credits attributable to taxable salary or wage income. 2011 tax filing Withholding from pension payments. 2011 tax filing   U. 2011 tax filing S. 2011 tax filing payers of benefits from employer-deferred compensation plans, individual retirement plans, and commercial annuities generally must withhold income tax from payments delivered outside of the United States. 2011 tax filing You can choose exemption from withholding if you: Provide the payer of the benefits with a residence address in the United States or a U. 2011 tax filing S. 2011 tax filing possession, or Certify to the payer that you are not a U. 2011 tax filing S. 2011 tax filing citizen or resident alien or someone who left the United States to avoid tax. 2011 tax filing Check your withholding. 2011 tax filing   Before you report U. 2011 tax filing S. 2011 tax filing income tax withholding on your tax return, you should carefully review all information documents, such as Form W-2, Wage and Tax Statement, and the Form 1099 information returns. 2011 tax filing Compare other records, such as final pay records or bank statements, with Form W-2 or Form 1099 to verify the withholding on these forms. 2011 tax filing Check your U. 2011 tax filing S. 2011 tax filing income tax withholding even if you pay someone else to prepare your tax return. 2011 tax filing You may be assessed penalties and interest if you claim more than your correct amount of withholding allowances. 2011 tax filing This image is too large to be displayed in the current screen. 2011 tax filing Please click the link to view the image. 2011 tax filing Form 673 30% Flat Rate Withholding Generally, U. 2011 tax filing S. 2011 tax filing payers of income other than wages, such as dividends and royalties, are required to withhold tax at a flat 30% (or lower treaty) rate on nonwage income paid to nonresident aliens. 2011 tax filing If you are a U. 2011 tax filing S. 2011 tax filing citizen or resident alien and this tax is withheld in error from payments to you because you have a foreign address, you should notify the payer of the income to stop the withholding. 2011 tax filing Use Form W-9 to notify the payer. 2011 tax filing You can claim the tax withheld in error as a withholding credit on your tax return if the amount is not adjusted by the payer. 2011 tax filing Social security benefits paid to residents. 2011 tax filing   If you are a lawful permanent resident (green card holder) and a flat 30% tax was withheld in error on your social security benefits, the tax is refundable by the Social Security Administration (SSA) or the IRS. 2011 tax filing The SSA will refund the tax withheld if the refund can be processed during the same calendar year in which the tax was withheld. 2011 tax filing If the SSA cannot refund the tax withheld, you must file a Form 1040 or 1040A with the Internal Revenue Service Center at the address listed under Where To File to determine if you are entitled to a refund. 2011 tax filing The following information must be submitted with your Form 1040 or Form 1040A. 2011 tax filing A copy of Form SSA-1042S, Social Security Benefit Statement. 2011 tax filing A copy of your “green card. 2011 tax filing ” A signed declaration that includes the following statements. 2011 tax filing   “I am a U. 2011 tax filing S. 2011 tax filing lawful permanent resident and my green card has been neither revoked nor administratively or judicially determined to have been abandoned. 2011 tax filing I am filing a U. 2011 tax filing S. 2011 tax filing income tax return for the taxable year as a resident alien reporting all of my worldwide income. 2011 tax filing I have not claimed benefits for the taxable year under an income tax treaty as a nonresident alien. 2011 tax filing ” Social Security and Medicare Taxes Social security and Medicare taxes may apply to wages paid to an employee regardless of where the services are performed. 2011 tax filing General Information In general, U. 2011 tax filing S. 2011 tax filing social security and Medicare taxes do not apply to wages for services you perform as an employee outside the United States unless one of the following exceptions applies. 2011 tax filing You perform the services on or in connection with an American vessel or aircraft (defined later) and either: You entered into your employment contract within the United States, or The vessel or aircraft touches at a U. 2011 tax filing S. 2011 tax filing port while you are employed on it. 2011 tax filing You are working in one of the countries with which the United States has entered into a bilateral social security agreement (discussed later). 2011 tax filing You are working for an American employer (defined later). 2011 tax filing You are working for a foreign affiliate (defined later) of an American employer under a voluntary agreement entered into between the American employer and the U. 2011 tax filing S. 2011 tax filing Treasury Department. 2011 tax filing American vessel or aircraft. 2011 tax filing   An American vessel is any vessel documented or numbered under the laws of the United States and any other vessel whose crew is employed solely by one or more U. 2011 tax filing S. 2011 tax filing citizens, residents, or corporations. 2011 tax filing An American aircraft is an aircraft registered under the laws of the United States. 2011 tax filing American employer. 2011 tax filing   An American employer includes any of the following. 2011 tax filing The U. 2011 tax filing S. 2011 tax filing Government or any of its instrumentalities. 2011 tax filing An individual who is a resident of the United States. 2011 tax filing A partnership of which at least two-thirds of the partners are U. 2011 tax filing S. 2011 tax filing residents. 2011 tax filing A trust of which all the trustees are U. 2011 tax filing S. 2011 tax filing residents. 2011 tax filing A corporation organized under the laws of the United States, any U. 2011 tax filing S. 2011 tax filing state, or the District of Columbia, Puerto Rico, the U. 2011 tax filing S. 2011 tax filing Virgin Islands, Guam, or American Samoa. 2011 tax filing   An American employer also includes any foreign person with an employee who is performing services in connection with a contract between the U. 2011 tax filing S. 2011 tax filing government (or any instrumentality thereof) and a member of a domestically controlled group of entities which includes such foreign person. 2011 tax filing Foreign affiliate. 2011 tax filing   A foreign affiliate of an American employer is any foreign entity in which the American employer has at least a 10% interest, directly or through one or more entities. 2011 tax filing For a corporation, the 10% interest must be in its voting stock. 2011 tax filing For any other entity, the 10% interest must be in its profits. 2011 tax filing   Form 2032, Contract Coverage Under Title II of the Social Security Act, is used by American employers to extend social security coverage to U. 2011 tax filing S. 2011 tax filing citizens and resident aliens working abroad for foreign affiliates of American employers. 2011 tax filing Once you enter into an agreement, coverage cannot be terminated. 2011 tax filing Excludable meals and lodging. 2011 tax filing   Social security tax does not apply to the value of meals and lodging provided to you for the convenience of your employer if it is reasonable to believe that you will be able to exclude the value from your income. 2011 tax filing Bilateral Social Security (Totalization) Agreements The United States has entered into agreements with some foreign countries to coordinate social security coverage and taxation of workers who are employed in those countries. 2011 tax filing These agreements are commonly referred to as totalization agreements and are in effect with the following countries. 2011 tax filing Australia Greece Norway Austria Ireland Poland Belgium Italy Portugal Canada Japan Spain Chile Korea, Sweden Czech South Switzerland Republic Luxembourg United Denmark Netherlands Kingdom Finland     France     Germany           Under these agreements, dual coverage and dual contributions (taxes) for the same work are eliminated. 2011 tax filing The agreements generally make sure that you pay social security taxes to only one country. 2011 tax filing Generally, under these agreements, you will only be subject to social security taxes in the country where you are working. 2011 tax filing However, if you are temporarily sent to work in a foreign country and your pay would otherwise be subject to social security taxes in both the United States and that country, you generally can remain covered only by U. 2011 tax filing S. 2011 tax filing social security. 2011 tax filing You can get more information on any specific agreement by contacting: Social Security Administration Office of International Programs P. 2011 tax filing O. 2011 tax filing Box 17741 Baltimore, MD 21235-7741 If you have access to the Internet, you can get more information at: http://www. 2011 tax filing socialsecurity. 2011 tax filing gov/international. 2011 tax filing Covered by U. 2011 tax filing S. 2011 tax filing only. 2011 tax filing   If your pay in a foreign country is subject only to U. 2011 tax filing S. 2011 tax filing social security tax and is exempt from foreign social security tax, your employer should get a certificate of coverage from the Office of International Programs. 2011 tax filing Covered by foreign country only. 2011 tax filing   If you are permanently working in a foreign country with which the United States has a social security agreement and, under the agreement, your pay is exempt from U. 2011 tax filing S. 2011 tax filing social security tax, you or your employer should get a statement from the authorized official or agency of the foreign country verifying that your pay is subject to social security coverage in that country. 2011 tax filing   If the authorities of the foreign country will not issue such a statement, either you or your employer should get a statement from the U. 2011 tax filing S. 2011 tax filing Social Security Administration, Office of International Programs, at the address listed earlier. 2011 tax filing The statement should indicate that your wages are not covered by the U. 2011 tax filing S. 2011 tax filing social security system. 2011 tax filing   This statement should be kept by your employer because it establishes that your pay is exempt from U. 2011 tax filing S. 2011 tax filing social security tax. 2011 tax filing   Only wages paid on or after the effective date of the totalization agreement can be exempt from U. 2011 tax filing S. 2011 tax filing social security tax. 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Page Last Reviewed or Updated: 14-Mar-2014

The 2011 Tax Filing

2011 tax filing 5. 2011 tax filing   Personal Use of Dwelling Unit (Including Vacation Home) Table of Contents Dividing Expenses Dwelling Unit Used as a HomeMain home. 2011 tax filing Shared equity financing agreement. 2011 tax filing Donation of use of the property. 2011 tax filing Examples. 2011 tax filing Days used for repairs and maintenance. 2011 tax filing Days used as a main home before or after renting. 2011 tax filing Reporting Income and DeductionsNot used as a home. 2011 tax filing Used as a home but rented less than 15 days. 2011 tax filing Used as a home and rented 15 days or more. 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing Only your rental expenses may deducted on Schedule E (Form 1040). 2011 tax filing Some of your personal expenses may be deductible if you itemize your deductions on Schedule A (Form 1040). 2011 tax filing You must also determine if the dwelling unit is considered a home. 2011 tax filing The amount of rental expenses that you can deduct may be limited if the dwelling unit is considered a home. 2011 tax filing Whether a dwelling unit is considered a home depends on how many days during the year are considered to be days of personal use. 2011 tax filing 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. 2011 tax filing Dwelling unit. 2011 tax filing   A dwelling unit includes a house, apartment, condominium, mobile home, boat, vacation home, or similar property. 2011 tax filing It also includes all structures or other property belonging to the dwelling unit. 2011 tax filing A dwelling unit has basic living accommodations, such as sleeping space, a toilet, and cooking facilities. 2011 tax filing   A dwelling unit does not include property (or part of the property) used solely as a hotel, motel, inn, or similar establishment. 2011 tax filing 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. 2011 tax filing Example. 2011 tax filing You rent a room in your home that is always available for short-term occupancy by paying customers. 2011 tax filing You do not use the room yourself and you allow only paying customers to use the room. 2011 tax filing This room is used solely as a hotel, motel, inn, or similar establishment and is not a dwelling unit. 2011 tax filing 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. 2011 tax filing When dividing your expenses, follow these rules. 2011 tax filing 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. 2011 tax filing (This rule does not apply when determining whether you used the unit as a home. 2011 tax filing ) Any day that the unit is available for rent but not actually rented is not a day of rental use. 2011 tax filing Fair rental price. 2011 tax filing   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. 2011 tax filing 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. 2011 tax filing   Ask yourself the following questions when comparing another property with yours. 2011 tax filing 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. 2011 tax filing Example. 2011 tax filing Your beach cottage was available for rent from June 1 through August 31 (92 days). 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing Your family also used the cottage during the last 2 weeks of May (14 days). 2011 tax filing The cottage was not used at all before May 17 or after August 31. 2011 tax filing You figure the part of the cottage expenses to treat as rental expenses as follows. 2011 tax filing The cottage was used for rental a total of 85 days (92 − 7). 2011 tax filing The days it was available for rent but not rented (7 days) are not days of rental use. 2011 tax filing The July weekend (2 days) you used it is rental use because you received a fair rental price for the weekend. 2011 tax filing You used the cottage for personal purposes for 14 days (the last 2 weeks in May). 2011 tax filing The total use of the cottage was 99 days (14 days personal use + 85 days rental use). 2011 tax filing Your rental expenses are 85/99 (86%) of the cottage expenses. 2011 tax filing Note. 2011 tax filing 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. 2011 tax filing Therefore, you had 16 days of personal use and 83 days of rental use for this purpose. 2011 tax filing 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. 2011 tax filing If you have a net loss, you may not be able to deduct all of the rental expenses. 2011 tax filing See Dwelling Unit Used as a Home, next. 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing See What is a day of personal use , later. 2011 tax filing 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. 2011 tax filing Instead, count it as a day of personal use in applying both (1) and (2) above. 2011 tax filing 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. 2011 tax filing 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). 2011 tax filing However, see Days used as a main home before or after renting , later. 2011 tax filing 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. 2011 tax filing Family includes only your spouse, brothers and sisters, half-brothers and half-sisters, ancestors (parents, grandparents, etc. 2011 tax filing ), and lineal descendants (children, grandchildren, etc. 2011 tax filing ). 2011 tax filing Anyone under an arrangement that lets you use some other dwelling unit. 2011 tax filing Anyone at less than a fair rental price. 2011 tax filing Main home. 2011 tax filing   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. 2011 tax filing Shared equity financing agreement. 2011 tax filing   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. 2011 tax filing Donation of use of the property. 2011 tax filing   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. 2011 tax filing Examples. 2011 tax filing   The following examples show how to determine if you have days of personal use. 2011 tax filing Example 1. 2011 tax filing You and your neighbor are co-owners of a condominium at the beach. 2011 tax filing Last year, you rented the unit to vacationers whenever possible. 2011 tax filing The unit was not used as a main home by anyone. 2011 tax filing Your neighbor used the unit for 2 weeks last year; you did not use it at all. 2011 tax filing 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. 2011 tax filing Example 2. 2011 tax filing You and your neighbors are co-owners of a house under a shared equity financing agreement. 2011 tax filing Your neighbors live in the house and pay you a fair rental price. 2011 tax filing 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. 2011 tax filing This is because your neighbors rent the house as their main home under a shared equity financing agreement. 2011 tax filing Example 3. 2011 tax filing You own a rental property that you rent to your son. 2011 tax filing Your son does not own any interest in this property. 2011 tax filing He uses it as his main home and pays you a fair rental price. 2011 tax filing 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. 2011 tax filing Example 4. 2011 tax filing You rent your beach house to Rosa. 2011 tax filing Rosa rents her cabin in the mountains to you. 2011 tax filing You each pay a fair rental price. 2011 tax filing 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. 2011 tax filing Example 5. 2011 tax filing You rent an apartment to your mother at less than a fair rental price. 2011 tax filing 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. 2011 tax filing Days used for repairs and maintenance. 2011 tax filing   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. 2011 tax filing 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. 2011 tax filing Example. 2011 tax filing Corey owns a cabin in the mountains that he rents for most of the year. 2011 tax filing He spends a week at the cabin with family members. 2011 tax filing 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. 2011 tax filing Corey's family members, however, work substantially full time on the cabin each day during the week. 2011 tax filing The main purpose of being at the cabin that week is to do maintenance work. 2011 tax filing Therefore, the use of the cabin during the week by Corey and his family will not be considered personal use by Corey. 2011 tax filing Days used as a main home before or after renting. 2011 tax filing   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. 2011 tax filing Do not count them as days of personal use if: You rented or tried to rent the property for 12 or more consecutive months. 2011 tax filing 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. 2011 tax filing However, this special rule does not apply when dividing expenses between rental and personal use. 2011 tax filing See Property Changed to Rental Use in chapter 4. 2011 tax filing Example 1. 2011 tax filing 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. 2011 tax filing You rented your house at a fair rental price from March 15, 2012, to May 14, 2013 (14 months). 2011 tax filing On June 1, 2013, you moved back into your old house. 2011 tax filing 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. 2011 tax filing Therefore, you would use the rules in chapter 1 when figuring your rental income and expenses. 2011 tax filing Example 2. 2011 tax filing On January 31, you moved out of the condominium where you had lived for 3 years. 2011 tax filing You offered it for rent at a fair rental price beginning on February 1. 2011 tax filing You were unable to rent it until April. 2011 tax filing On September 15, you sold the condominium. 2011 tax filing 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. 2011 tax filing Examples. 2011 tax filing   The following examples show how to determine whether you used your rental property as a home. 2011 tax filing Example 1. 2011 tax filing You converted the basement of your home into an apartment with a bedroom, a bathroom, and a small kitchen. 2011 tax filing You rented the basement apartment at a fair rental price to college students during the regular school year. 2011 tax filing You rented to them on a 9-month lease (273 days). 2011 tax filing You figured 10% of the total days rented to others at a fair rental price is 27 days. 2011 tax filing During June (30 days), your brothers stayed with you and lived in the basement apartment rent free. 2011 tax filing Your basement apartment was used as a home because you used it for personal purposes for 30 days. 2011 tax filing Rent-free use by your brothers is considered personal use. 2011 tax filing Your personal use (30 days) is more than the greater of 14 days or 10% of the total days it was rented (27 days). 2011 tax filing Example 2. 2011 tax filing 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). 2011 tax filing Your sister-in-law stayed in the room, rent free, for the last 3 weeks (21 days) in July. 2011 tax filing You figured 10% of the total days rented to others at a fair rental price is 3 days. 2011 tax filing The room was used as a home because you used it for personal purposes for 21 days. 2011 tax filing That is more than the greater of 14 days or 10% of the 27 days it was rented (3 days). 2011 tax filing Example 3. 2011 tax filing You own a condominium apartment in a resort area. 2011 tax filing You rented it at a fair rental price for a total of 170 days during the year. 2011 tax filing 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. 2011 tax filing Your family actually used the apartment for 10 of those days. 2011 tax filing Therefore, the apartment is treated as having been rented for 160 (170 – 10) days. 2011 tax filing You figured 10% of the total days rented to others at a fair rental price is 16 days. 2011 tax filing Your family also used the apartment for 7 other days during the year. 2011 tax filing You used the apartment as a home because you used it for personal purposes for 17 days. 2011 tax filing That is more than the greater of 14 days or 10% of the 160 days it was rented (16 days). 2011 tax filing Minimal rental use. 2011 tax filing   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. 2011 tax filing See Used as a home but rented less than 15 days, later, for more information. 2011 tax filing Limit on deductions. 2011 tax filing   Renting a dwelling unit that is considered a home is not a passive activity. 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing Any expenses carried forward to the next year will be subject to any limits that apply for that year. 2011 tax filing 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. 2011 tax filing   To figure your deductible rental expenses for this year and any carryover to next year, use Worksheet 5–1. 2011 tax filing Reporting Income and Deductions Property not used for personal purposes. 2011 tax filing   If you do not use a dwelling unit for personal purposes, see chapter 3 for how to report your rental income and expenses. 2011 tax filing Property used for personal purposes. 2011 tax filing   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. 2011 tax filing Not used as a home. 2011 tax filing   If you use a dwelling unit for personal purposes, but not as a home, report all the rental income in your income. 2011 tax filing 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 . 2011 tax filing The expenses for personal use are not deductible as rental expenses. 2011 tax filing   Your deductible rental expenses can be more than your gross rental income; however, see Limits on Rental Losses in chapter 3. 2011 tax filing Used as a home but rented less than 15 days. 2011 tax filing   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). 2011 tax filing You are not required to report the rental income and rental expenses from this activity. 2011 tax filing The expenses, including qualified mortgage interest, property taxes, and any qualified casualty loss will be reported as normally allowed on Schedule A (Form 1040). 2011 tax filing See the Instructions for Schedule A (Form 1040) for more information on deducting these expenses. 2011 tax filing Used as a home and rented 15 days or more. 2011 tax filing   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. 2011 tax filing 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 . 2011 tax filing The expenses for personal use are not deductible as rental expenses. 2011 tax filing   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. 2011 tax filing You do not need to use Worksheet 5-1. 2011 tax filing   However, if you had a net loss from renting the dwelling unit for the year, your deduction for certain rental expenses is limited. 2011 tax filing To figure your deductible rental expenses and any carryover to next year, use Worksheet 5–1. 2011 tax filing Worksheet 5-1. 2011 tax filing 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. 2011 tax filing Did you use the dwelling unit as a home this year? (See Dwelling Unit Used as a Home . 2011 tax filing ) 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. 2011 tax filing Rental Use Percentage A. 2011 tax filing Total days available for rent at fair rental price A. 2011 tax filing       B. 2011 tax filing Total days available for rent (line A) but not rented B. 2011 tax filing       C. 2011 tax filing Total days of rental use. 2011 tax filing Subtract line B from line A C. 2011 tax filing       D. 2011 tax filing Total days of personal use (including days rented at less than fair rental price) D. 2011 tax filing       E. 2011 tax filing Total days of rental and personal use. 2011 tax filing Add lines C and D E. 2011 tax filing       F. 2011 tax filing Percentage of expenses allowed for rental. 2011 tax filing Divide line C by line E     F. 2011 tax filing . 2011 tax filing PART II. 2011 tax filing Allowable Rental Expenses 1. 2011 tax filing Enter rents received 1. 2011 tax filing   2a. 2011 tax filing Enter the rental portion of deductible home mortgage interest and qualified mortgage insurance premiums (see instructions) 2a. 2011 tax filing       b. 2011 tax filing Enter the rental portion of real estate taxes b. 2011 tax filing       c. 2011 tax filing Enter the rental portion of deductible casualty and theft losses (see instructions) c. 2011 tax filing       d. 2011 tax filing Enter direct rental expenses (see instructions) d. 2011 tax filing       e. 2011 tax filing Fully deductible rental expenses. 2011 tax filing Add lines 2a–2d. 2011 tax filing Enter here and  on the appropriate lines on Schedule E (see instructions) 2e. 2011 tax filing   3. 2011 tax filing Subtract line 2e from line 1. 2011 tax filing If zero or less, enter -0- 3. 2011 tax filing   4a. 2011 tax filing Enter the rental portion of expenses directly related to operating or maintaining  the dwelling unit (such as repairs, insurance, and utilities) 4a. 2011 tax filing       b. 2011 tax filing Enter the rental portion of excess mortgage interest and qualified mortgage insurance premiums (see instructions) b. 2011 tax filing       c. 2011 tax filing Carryover of operating expenses from 2012 worksheet c. 2011 tax filing       d. 2011 tax filing Add lines 4a–4c d. 2011 tax filing       e. 2011 tax filing Allowable expenses. 2011 tax filing Enter the smaller of line 3 or line 4d (see instructions) 4e. 2011 tax filing   5. 2011 tax filing Subtract line 4e from line 3. 2011 tax filing If zero or less, enter -0- 5. 2011 tax filing   6a. 2011 tax filing Enter the rental portion of excess casualty and theft losses (see instructions) 6a. 2011 tax filing       b. 2011 tax filing Enter the rental portion of depreciation of the dwelling unit b. 2011 tax filing       c. 2011 tax filing Carryover of excess casualty losses and depreciation from 2012 worksheet c. 2011 tax filing       d. 2011 tax filing Add lines 6a–6c d. 2011 tax filing       e. 2011 tax filing Allowable excess casualty and theft losses and depreciation. 2011 tax filing Enter the smaller of  line 5 or line 6d (see instructions) 6e. 2011 tax filing   PART III. 2011 tax filing Carryover of Unallowed Expenses to Next Year 7a. 2011 tax filing Operating expenses to be carried over to next year. 2011 tax filing Subtract line 4e from line 4d 7a. 2011 tax filing   b. 2011 tax filing Excess casualty and theft losses and depreciation to be carried over to next year. 2011 tax filing  Subtract line 6e from line 6d b. 2011 tax filing   Worksheet 5-1 Instructions. 2011 tax filing Worksheet for Figuring Rental Deductions for a Dwelling Unit Used as a Home Caution. 2011 tax filing 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. 2011 tax filing Line 2a. 2011 tax filing Figure the mortgage interest on the dwelling unit that you could deduct on Schedule A as if you had not rented the unit. 2011 tax filing Do not include interest on a loan that did not benefit the dwelling unit. 2011 tax filing 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. 2011 tax filing Include interest on a loan used to buy, build, or improve the dwelling unit, or to refinance such a loan. 2011 tax filing Include the rental portion of this interest in the total you enter on line 2a of the worksheet. 2011 tax filing   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. 2011 tax filing See the Schedule A instructions. 2011 tax filing However, figure your adjusted gross income (Form 1040, line 38) without your rental income and expenses from the dwelling unit. 2011 tax filing See Line 4b to deduct the part of the qualified mortgage insurance premiums not allowed because of the adjusted gross income limit. 2011 tax filing Include the rental portion of the amount from Schedule A, line 13, in the total you enter on line 2a of the worksheet. 2011 tax filing   Note. 2011 tax filing Do not file this Schedule A or use it to figure the amount to deduct on line 13 of that schedule. 2011 tax filing Instead, figure the personal portion on a separate Schedule A. 2011 tax filing 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. 2011 tax filing           Line 2c. 2011 tax filing 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. 2011 tax filing To do this, complete Section A of Form 4684, Casualties and Thefts, treating the losses as personal losses. 2011 tax filing If any of the loss is due to a federally declared disaster, see the Instructions for Form 4684. 2011 tax filing On Form 4684, line 17, enter 10% of your adjusted gross income figured without your rental income and expenses from the dwelling unit. 2011 tax filing Enter the rental portion of the result from Form 4684, line 18, on line 2c of this worksheet. 2011 tax filing   Note. 2011 tax filing Do not file this Form 4684 or use it to figure your personal losses on Schedule A. 2011 tax filing Instead, figure the personal portion on a separate Form 4684. 2011 tax filing           Line 2d. 2011 tax filing Enter the total of your rental expenses that are directly related only to the rental activity. 2011 tax filing These include interest on loans used for rental activities other than to buy, build, or improve the dwelling unit. 2011 tax filing Also include rental agency fees, advertising, office supplies, and depreciation on office equipment used in your rental activity. 2011 tax filing           Line 2e. 2011 tax filing 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. 2011 tax filing Enter the amounts on lines 2a, 2b, 2c, and 2d on the appropriate lines of Schedule E. 2011 tax filing           Line 4b. 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing Do not include interest on a loan that did not benefit the dwelling unit  (as explained in the line 2a instructions). 2011 tax filing           Line 4e. 2011 tax filing 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. 2011 tax filing *           Line 6a. 2011 tax filing To find the rental portion of excess casualty and theft losses, use the Form 4684 you prepared for line 2c of this worksheet. 2011 tax filing   A. 2011 tax filing Enter the amount from Form 4684, line 10       B. 2011 tax filing Enter the rental portion of line A       C. 2011 tax filing Enter the amount from line 2c of this worksheet       D. 2011 tax filing Subtract line C from line B. 2011 tax filing Enter the result here and on line 6a of this worksheet               Line 6e. 2011 tax filing 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. 2011 tax filing * *Allocating the limited deduction. 2011 tax filing 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. 2011 tax filing Enter the amount you allocate to each expense on the appropriate line of Schedule E, Part I. 2011 tax filing Prev  Up  Next   Home   More Online Publications