Claim Lost Rent on Schedule E
Schedule E is a form that allows you to fill out profit and loss from rental income on your taxes. This could be real estate, farm rent, partnerships, estates or trusts. If you have rental property that was vacant for some part of the year or was not able to command enough income to break even, Schedule E allows you to report this information to the Internal Revenue Service.
Instructions
1. Organize your paperwork before you begin. Sort all of your rental income information into one category so you can easily sum the annual rental profit. Organize your bills and expenses in another category. Did you perform maintenance work or repairs on the rental unit?
2. List your name and Social Security number at the top of the form. Fill out the type and address of the rental property on line 1.
3. Fill out the amount of rents you received on line 2. If you received no rent for the year, write zero.
4. Answer the prompts on lines 5 to 18 that ask about expenses you incurred. Expense categories include advertising, maintenance, management fees, legal fees, repairs, mortgage interest and taxes. You should be able to fill out this information using the receipts and bills you've organized. Sum up the total expenses on lines 5 to 18 and enter that number in on line 19.
5. Calculate the rental property's depreciation using IRS Form 4562, which covers depreciation and amortization. Enter in the amount of depreciation on line 20.
6. Add lines 19 and 20 and enter their sum on line 21 to get your total expenses.
7. Subtract line 21 from line 3 to show your loss of rent. Because you have a loss of rent, this should be a negative or very low number, depending on how severe your rent losses were.
8. Complete Form 8582 to see if you can legally claim all of the lost rent. Form 8582 asks questions about past rental activity, profit and loss to determine if your losses are passive or if you're reporting a first-time loss.
9. Enter the same number from line 22 on line 23 if Form 8582 determine that you can claim all of your lost rent income. Enter in a lower number if Form 8582 requires that you limit the deduction you're reporting.
10. Enter zero for line 24 if you have no income. If you do have positive rental income, write the number on line 24. Enter the sum total of all your real estate losses on line 25.
11. Combine lines 24 and 25 to get the final number of lost rent you will be reporting on Schedule E.
Tags: Form 8582, rental income, rental property, Claim Lost Rent, from line, lines enter, loss rent
