Rental income

Rental Income

Rental Income net after losses, shows up on your 1040  tax return, Schedule ESchedule 1 and is counted towards MAGI income.

Schedule E Supplemental Income & Loss

To get Covered CA MAGI Income

take #Line8b 11 Adjusted Gross income then add line 2a, 6a &   8 (Foreign Income)

 

MAGI Income from 1040

Tax Cut & Jobs Act 

 

Nolo on Tax Cut & Jobs Act

IRS Tips

Dwelling Unit. 

This may be a house, an apartment, condominium, mobile home, boat, vacation home or similar property. It’s possible to use more than one dwelling unit as a residence during the year.

Used as a Home. 

The dwelling unit is considered to be used as a residence if the taxpayer uses it for personal purposes during the tax year for more than the greater of: 14 days   or 10% of the total days rented to others at a fair rental price. Rental expenses cannot be more than the rent received.

Personal Use. 

Personal use means use by the owner, owner’s family, friends, other property owners and their families. Personal use includes anyone paying less than a fair rental price.

Divide Expenses.

Special rules generally apply to the rental of a home, apartment or other dwelling unit that is used by the taxpayer as a residence during the taxable year. Usually, rental income must be reported in full, and any expenses need to be divided between personal and business purposes. Special deduction limits apply.

How to Report.

Use Schedule E to report rental income and rental expenses on Supplemental Income and Loss. Rental income may also be subject to Net Investment Income Tax. Use Schedule A to report deductible expenses for personal use on Itemized Deductions. This includes such costs as mortgage interest, property taxes and casualty losses.

Special Rules. 

If the dwelling unit is rented out fewer than 15 days during the year, none of the rental income is reportable and none of the rental expenses are deductible. Find out more about these rules; see Publication 527, Residential Rental Property (Including Rental of Vacation Homes).

Additional IRS Resources:

IRS Topic 414 Rental Income & Expenses

Tips

IRS Rental Income Publication #527 pdf

Form 1040, Schedule E (PDF), Supplemental Income and Loss, to report income and expenses related to real estate rentals

Turbo Tax Summary

Nolo Press – Top Ten Rental Deductions?

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#Vacation Homes MAGI Income?

 

IRS Video  

Renting out a vacation property to others can be profitable. If you do this, you  must normally report the rental income on your tax return. You may not have to report the rent, however, if the rental period is short and you also use the property as your home. Here are some tips that you should know:

  • Vacation Home.  A vacation home can be a house, apartment, condominium, mobile home, boat or similar property.
  • Schedule E.  You usually report rental income and rental expenses on Schedule E, Supplemental Income and Loss. Your rental income may also be subject to Net Investment Income Tax.
  • Used as a Home.  If the property is “used as a home,” your rental expense deduction is limited. This means your deduction for rental expenses can’t be more than the rent you received. For more about these rules, see Publication 527, Residential Rental Property (Including Rental of Vacation Homes).
  • Divide Expenses.  If you personally use your property and also rent it to others, special rules apply. You must divide your expenses between rental use and personal use. To figure how to divide your costs, you must compare the number of days for each type of use with the total days of use.
  • Personal Use.  Personal use may include use by your family. It may also include use by any other property owners or their family. Use by anyone who pays less than a fair rental price is also considered personal use.
  • Schedule A.  Report deductible expenses for personal use on Schedule A, Itemized Deductions. These may include costs such as mortgage interest, property taxes and casualty losses.
  • Rented Less than 15 Days.  If the property is “used as a home” and you rent it out fewer than 15 days per year, you do not have to report the rental income. In this case you deduct your qualified expenses on Schedule A.
  • Use IRS Free File.  If you still need to file your 2015 tax return, you can use IRS Free File to make filing easier. Free File is available until Oct. 17. Free File is available only through the IRS.gov website.

IRS Tax Tips provide valuable information throughout the year. IRS.gov offers tax help and info on various topics including common tax scamstaxpayer rights and more.

Additional IRS Resources:

Covered CA Certified Agent

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California #Tenants Rights

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California Tenants & Landlords Rights & Responsibilities

california tenants rights

See our webpage on Small Claims Court & Mediation

 

CA Department of Real Estate Publications

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